NEW HIGHS -- BREAKOUT OR DESTINED TO RET
Suntrust closed at an all-time high on Friday at
$82 7/16. This climaxed five straight days of higher
stock prices for STI and a two and one-half month
consolidation period between $77 - $82. Market permitting,
Suntrust seems poised to breakout further. The only snafu
is the light volume on Friday. Monday's action needs
to confirm the new high when all the players are
present.
I don't buy into this talk of an STI merger that
will bring a high premium. It's more likely there will
be a merger of equals similar to Norwest-Wells
Fargo. Suntrust would be a wonderful acquisition,
however at 24 x 1998 earnings and 3 x book value I
believe STI is fully valuated.
The last stock
split (2-1) was in the middle of 1996 in the low $70s
so it would not surprise me if another split is in
the cards. Maybe management waits until STI reaches
the $90s and split the stock 3-1. STI announces
earnings on July 9th, so keep your fingers crossed.