There are a number of reasons why the financials are back in focus. As a group they're up roughly 35% in just three months - after an even more impressive spurt earlier this year. Yet at the same time they've already backed off their September highs by about 10%. Individual issues may have risen or fallen slightly more or less during that period, but the question for the sector remains: what's next for the financials? Have they corrected significantly enough to afford investors a reasonable entry point? Or is it worthwhile waiting a little longer for the long-expected profit-taking to conclude?
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Choosing Financials
The question is one we'd rather not entertain, or, rather, we'd prefer to approach it a little more philosophically. Why not just sift through those with the best fundamentals and let the ones that evince real value be chosen.
With that in mind, we will highlight a number companies that are mid- to micro-cap financials with strong P/Es and dividend yields, and that currently trade below book value.
Mid-American Small Caps
FFD Financial Corporation (NASDAQ:FFDF) is a micro-cap savings and loan operation based in
FFDF also trades at roughly three quarters of the company's break-up value, with a price-to-book ratio of 0.73. Noteworthy too, perhaps, is the fact that FFD saw fit to raise its quarterly dividend last year during the very heart of the global banking crisis.
HopFed Bancorp Inc. (NASDAQ:HFBC) is another small banking concern with branches in
Bank of McKenney (NASDAQ:BOMK) shares yield 4.5% and trade with a P/E of 10. The bank's operations are centered around several counties in
The shares have increased in value by over 20% since bottoming in April, yet still have a very competitive P/B of just 0.63.
Less than Half of Book Value
CFNB recently reported a 47% year-over-year increase in per share earnings. The company has a market cap of $120 million.
Banc Latinamericano de Comercio Exterior, S.A. (NYSE:BLX) is the product of several Latin American and
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