You will not sell until share price hits $40? When did this stock last have sustained trading at this level, and how long do you intend to hold? There is a cost in this strategy. The best trade here is volatility, not buy and hold. You could be looking at treasuries at 7% in a few years and you are stuck with a BB&T hold strategy that is paying 4% with no chance in hell of the price moving up to $40. You might be sitting on this investmenet for a decade. As for Norm, he often gets "paralysis by analysis". He goes to great ends to show the positive metrics of the company, but in reality, the street is not looking at these things and have not for many years. BB&T has no loan growth...zippo.... and they pay NOTHING for their deposits (thanks to the fed keeping rates at zero). This does not a bank make. You should stay away from financials for some time.
"BB&T has no loan growth...zippo.... and they pay NOTHING for their deposits (thanks to the fed keeping rates at zero). This does not a bank make. You should stay away from financials for some time."
Pure hogwash. Bbt has increased its pretax pre-provision earnings 12 fold since 1995. Their net interest margin in the 2nd qtr. 2011, I believe, hit an historic high. Going forward, their loan losses will swing to the other side of the pendulum. Even with a slow growth economy, their loans will show decent growth driven by many different factors.
Bbt is a solid bank but it has been a bad investment over the last 10 years. Their fortunes however, will start to reverse over the next year. I'm banking on it.
Their balance sheet is a wasting asset norm...they simply are trying to prop it up with more deposits for which they pay nothing. NIM increases are brought on by two things: expense controls and spread. At some point they cannot keep cutting cost or they get to meat bone and sinew. On the spread, their lack of loan growth reflects same. No love if spreads appear good with no growth. Make more loans at that spread....but they cannot do it, because there are just not enough borrowers out there who can meet BB&T UW standards. First the industry needs a game changer and then BB&T needs an internal game changing event. Once those two things happen, you have a winner. But not before....again trade the volatility. You have been beat by treasuries for over decade by holding this stock...it could be the same thing for another 10 years. Not good for long term holders.
Lastly the vaunted earnings growth you mention was mostly the product of its community bank acquisition strategy...not internal loan growth...and the purchase of fee-based insurance agencies and that ran out of steam a long time ago. Colonial was their first big acquisition....not so good. And they have never been able to grow market share organically, only thru acquisitions, which was easy when their share price was overvalued and they used stock as currency. Cannot do that anymore either. I'll give you the answer to these conundrums if you ask.