Improving credit trends make bank stocks an attractive buy, said Adam Peck, portfolio manager at Heartland Advisors Value Fund. He shared his top regional bank stock picks with investors.
“We’re fundamentally bottoms-up stock pickers, and we believe that banks are an attractive opportunity today,” Peck told CNBC.
“Banks have underperformed for the last four years, and we think the times have changed now.”
Peck told investors to look for companies that are priced attractively, have strong balance sheets, good management teams and high insider stock ownership.
Trico Bankshares —“Their non-performing loans credit got better from the last quarter compared to the third quarter,” he said of the firm. “They have a ton of cash on their balance sheet and we think they have an opportunity to acquire failed banks from the FDIC so they have an opportunity to increase market share.”
Marshall & Ilsley—“We are contrarian investors and if you look at street sentiments, it’s terrible, but the valuation is certainly attractive,” he said. “It’s trading at five-times book value and just like Trico, credit is getting better. It’s improved for two consecutive quarters.”
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No immediate information was available for Peck or his firm.