6 Bank Stocks Near 52-Week Lows

If you're aiming to "buy low and sell high," then it makes infinite sense to start your search with bargain-priced stocks. Regularly reviewing a list of stocks trading near their 52-week lows can be a great first step.

Here, I'll try to do the initial legwork for you. To prevent us from being inundated with scores of disparate companies, I'll conduct my search by industry. This will allow us to make some initial comparisons among semi-related companies.

There are 24 industry groups as defined by the Global Industry Classification Standard. Here's a list of low-rollers from the banking industry. Specifically, these are the six largest banks trading near 52-week lows (by market cap).

Company

Market Capitalization (in millions)

% Change from 52-week Low

Price-to-Tangible-Book Ratio

HSBC (NYSE: HBC  )

$185,602

      11.0%

      1.6

Wells Fargo (NYSE: WFC  )

$130,155

      8.0%

      1.6

Royal Bank of Canada (NYSE: RY  )

$78,840

      15.0%

      3.4

Westpac (NYSE: WBK  )

$67,025

      10.6%

      2.7

Mitsubishi UFJ Financial Group (NYSE: MTU  )

$66,558

      1.1%

     0.7

US Bancorp (NYSE: USB  )

$44,401

      13.3%

      2.8

Source: Capital IQ, a division of Standard & Poor's. Data as of Oct. 18.

In general, I look for banks with a price-to-tangible-book value below 1.5. For those unfamiliar with the metric, it's the price-to-book ratio subtracting out intangibles like goodwill. In other words, it's a more stringent way of seeing how cheap a bank is by comparing its price to its equity (or book value).

Using this metric, the Japanese bank Mitsubishi UFJ Financial Group is the only one that passes. The problem for American investors is the added difficulty assessing a foreign bank and economy. That said, a 0.7 ratio is certainly eye-popping.

The Canadian banks have been a bastion of non-housing-bubble-ness. I have been quite intrigued, but their price tags have reflected their reputations. You can see this in Royal Bank of Canada's 3.4 multiple.

Similarly, US Bancorp is a well-regarded U.S. bank with a correspondingly high premium. Wells Fargo is similarly well-regarded, although you have to factor in the effects of its acquisition of Wachovia. Given its reputation, Wells at a 1.6 price-to-tangible-book ratio is something to keep on your radar.

Interested in reading more about Mitsubishi UFJ or Wells? Add them to My Watchlist, and all of our Foolish analysis on these stocks.

Anand Chokkavelu doesn't own shares of any companies mentioned. He posts his favorite articles on his Twitter feed.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.


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