I knovw PBCT has ample cash on hand and trades at a discount to peers on a price/tangible book value basis, but why such a high PE? Over the past few years, PCBT's best year was in 2007, when it earned 150 million. This was before it was affected by the blowup.
If PCBT has a 5 billion market cap, that would give it a PE of 33 times that year's earnings. Shares outstanding went from 298 million to 345 million during that time.
Does anyone expect PCBT's earnings to skyrocket to justify the high share price relative to earnings? It would mean substantial earnings increases to levels they have never seen before.
You're looking at it wrong. The P/E is a backwards looking indicator. You have to look at the forward P/E which is some where around 8-15. People's is capable of delivering 30 million net per quarter. Divide 120 by 15 you come out with an 8 PE at a stock price of $15.
BAC and a large amount of banks lost money last year so have no e to go with the p. Right now People's should buy back shares at these levels. It would result in only having 100 million shares left.
If I was the board of directors I would take the bank private at this price level. This is the cheapest bank in the NE at current valuations. Valuations eventually close the gap with the peers in the industry. People's has a long way to run up at these levels.
Going forward energy and financials should lead the market up.