I am also a Virginia Tech business graduate. I am coming over to BB&T via the Matewan Mational Bank purchase. Interested in getting various viewpoints on BB&T. I am not sure whether to hold the stock or sell off. What is the feeling here?
From a 30+ year s/h, if you're in for longer than a year, consider: . from y/e 1994 thru y/e 1998 stock price quadrupled.
. five yr. total return is 34%; S&P is 26% same period
. five yr. dividend growth 15%; S&P 5%
Regarding aquisition strategy, the '98 annual report is pretty candid;"interested in aquiring community banks and thrifts in $250 mil to $10 bil range with primary efforts concentrated in Carolinas, Virginia, and Maryland. Secondarily, looking for opportunities in contiguous states of West Virginia, Kentucky and Georgia" The key is willingness to sell, BB&T isn't an unfriendly aquirer. Non-bank targets are insurance agencies (BB&T now 16th largest agency in U.S.) and financial services cos. that can be logically integrated.
This strategy has been in place for years, and they've done a great job of executing on it and have a P/E above the group average. This fact and the fear of inflation referred to by an earlier post have held bank prices down or flat in recent months.I believe BB&T will make up for lost time and hit 40 - 45 within 18 months. If the long bond goes to 6.5%, it'll take longer. IMHO......................................Fan
If you are in for the long haul you will be well served by holding the stock. I suspect they will make numerous acquisitions after 1/1/2000 and before 12/31/00 due to the elimination of use of the pooling method (announced by FASB on 4/21/99) and that might cause some near-term modest share price growth, but they are building a valuable franchise and they are highly praised for their performance as Bankers.
But what about their plans for WVA? Having bought Matewan, which conveniently appears to not overlap with OVB and UBSI, are they just waiting for Y2K to pass before they strike a deal with one of these banks and take a leading position in the state?