Time For This Bank To Get Serious
By Chad Henage - February 13, 2013 | Tickers: BBT, MTB, PNC, STI | 0 Comments
Chad is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
It's a natural instinct to try and hold things together in whatever way possible when a company goes through a rough patch. Having worked in a bank for over 10 years, I know that there were times the bank “suggested” that we cut certain expenses, or that raises were either impossible or very small because of the trying economic environment. That being said, we knew that our day to day work did make a difference to the bottom line of the company, and that eventually things would turn around. Some banks have a hard time getting out of this “survival” mode, and I'm afraid that's exactly what's going on at SunTrust (NYSE: STI).
It's Time To Move Forward
It should be no secret that SunTrust had its share of problems due to the Great Recession. The company had been slowly working through its issues, and made what I have deemed, “The Worst Stock Sale In History.” In short, the company made one of the best investments in the history of finance by turning their $100,000 investment in Coca-Cola into 60 million shares. These shares were generating about $61 million in annualized dividend income, but now are gone. While it's true the company booked a large gain from the sale, and used the funds to shore up its balance sheet, there is no way to duplicate this type of investment again.
That being said, it's time for the bank to move forward. Based on their last earnings release, the troops need their marching orders in a little more clear language. There are four key measures to any bank, unfortunately for SunTrust, they are falling behind in three of the four categories.
One Out Of Four Isn't Cutting It
The first thing investors should look at when measuring a bank is their deposit and loan growth. Banks that have strong deposit a
This guy has been slamming the stock for more than a year, and guess what? The stock has been going up since he started, over 50% at this time. More than that, the stock is poised to move up another 50% over the next 18 months.
I'm telling it like it is too - only difference is I've been right over the past 18 months and will continue to be going forward.