Is there anyone out there who can tell me what in the world is going on with Frost? Heck...the earnings are great, the company has no vulnerability with credit cards, the loan portfolio is based on sound, conservative loan practices...and all seems well. Even oip prices are high!
The stock is down a third in a short period of time. Anyone got any clues to provide me with?
I'd be appreciative if someone has a crystal ball. Walrusrus
Hang in there. I've owned this stock for about 5 years and always wish I had bought more. The recent price drop has allowed me to add to my position at $20/ share. I think its a solid bank that will continue to grow and develop a following with instituitonal investors as it becomes larger. Both the P/E (10) and book value (2x) are very reasonable for this Texas franchise. It is the only large independent bank (> $5 billion in assets) remaining in Texas, which makes it an attractive takeover candidate. All the other banks were bought out in the oil crisis and are owned by out of state institutions.
Every sector has a down turn. I am not saying anything bad about the bank, just the fact that the stock has stalled(until recently). I gave you two hot stocks and both have had runups and Cylk has come down a bit near my suggested price. Have you seen ENTU? You would of made a killing. Stay with CFR, but take your extra money and do your DD on WHT(White technolgies). It is around $15 and actually makes a profit! Just do me a favor and spend 10 minutes on this stock and you will be very impressed. You can thank me later if you can handle eating a humble pie.
Frost (then known as CFBI) showed great ability to benefit from boom times in the late seventies-early eighties. But its downside protection when the oil boom ended in the middle eighties was somewhat less effective.
I'd assign much of the former difficulties to a proclivity to hire University of Texas grads, make them loan officers immediately, and grant them too much authority. They've shown a propensity in the past to get themselves into trouble with too high a loan concentration in Oil and Mexico, making them vulnerable to the inevitable economic downturn. And accepting collateral valued at market in boom times which becomes worthless during bust periods.
Has Frost learned from the errors of previous market cycles? Only time will tell. AND one must recognize that this company did weather the cycles better than some of their competitors. But if they are positioned to repeat previous errors in this rising interest rate environment, a decline in the stock price is justified.