I'll keep this one short, because I'm taping a YouTube video right now, and talking about how much I really like the banking sector (though I'm not talking specific stocks in the video).
I think interest rates are primed to head higher in coming months. That can only help all bank stocks, in my opinion.
There's one in particular that I find very intriguing and in my opinion, a goodBUY:
Signature Bank (SBNY)'s shares look like they're on the verge of trending sharply higher.
We're getting SBNY's shares for not much more than they were trading in March May or June - the prior peaks in the chart.
I think it could hit $450 in the next 6-12 months.
With the Delta variant peaking here in Florida (and I believe soon to happen in other states as well) - that means the likelihood of a stronger economy in coming months .
With chairman Jay Powell and the Federal Reserve discussing 'tapering' their bond purchases at some point in coming quarters...interest rates are going to be on the rise, too.
So I believe Signature's lending and deposit operations will do very well in coming months, taking the stock to new highs.
But there's more.
See, from the outside, Signature looks like a standard ol' bank.
On the inside though, Signature is a bank that definitely gets the new digital crypto-ized financial era that we appear to be heading towards these days.
For example, SBNY took in $6.3 billion in deposits during the second quarter. Of that figure, roughly half - $3.4 billion worth - was "digital asset exchanges." In other words, cryptocurrencies of various kinds.
The bank is also in the process of offering loans backed by bitcoin assets.
As you can see from the table below, SBNY has strong earnings growth. In fact, despite its focus on crypto, it's trading at a valuation (a P/E level 17) that's not much higher than a standard run-of-the-mill bank.
I'm betting that will change in coming months.
With all that in mind, I think SBNY is a great place for a trade idea.
It's a bank - boring, yes.
But with SNBY's focus on crypto as well...I think that could make the shares a real magnet for growth and momentum investors and speculators, too.
For this trade, I would be looking to buy SBNY at the market price around $262. I think it can get to $450 over the next 6-12 months.
My risk would be essentially $40 - if I turned out to be wrong about the thesis or timing, and the shares moved from the current price down to $222 or so.
Best of goodBUYs!