The accompanying table presents the 25 lowest-rated stocks in my US-based Regional Banking Index. The index contains a total of 99 companies with market caps between $500 million to $20 billion which are classified as either regional banks or savings and loan companies. The ratings for each company are calculated quarterly based on a formula which considers the price-to-book ratio, the trailing 52-week stock price performance, and the percentage of total market caps represented by each company.
Since putting together the index at the end of May, many of the companies have either gone away (such as WaMu) or are on the verge of going away (Nat City). I expect the shakeout in the weak, smaller regional banks to continue, which benefits the following large and mega-cap banks: Bank of America (BAC), Citigroup (C), JP Morgan (JPM), U.S. Bancorp (USB), and PNC Financial (PNC).
$10.7 (09/30/08)
