Tuesday’s 52-week highs and lows were 245 and 61, respectively, according to StockTwits’ Trends with No Friends data. It’s not the most significant gap in 2024, but it’s high nonetheless. U.S. stocks remain overvalued and on a roll.
Financial stocks had the highest gap between 52-week highs (48) and lows (4) yesterday, with a multiple of 12x. While most of the action in financial stocks was higher, some stragglers were on the downside.
Of the 48 stocks hitting 52-week highs, 25 were regional banks, followed by property and casualty insurers (7), asset management (5), capital markets (4), life insurers (2), other insurers (3), financial conglomerates (1), and credit services (1).
Of the four hitting 52-week lows, there was one each from life insurers, credit services, regional banks, and asset management.
As I said, stocks aren’t entirely cheap right now. However, that doesn’t mean there aren’t some financial stocks worth buying that hit 52-week highs. There’s even one from the small group hitting 52-week lows on Tuesday.
Stock Yards Bancorp (SYBT)
I’m the person at the racetrack who bets on a horse because of its name. Therefore, I couldn’t pass up a regional bank named Stock Yards Bancorp (SYBT). Based in Louisville, I’d bet dollars to donuts it had a history in the meatpacking business. I’m only half joking.
SYBT hit its 22nd 52-week high yesterday at $77.82. That’s just a little over a dollar off the all-time high of $78.71 set on Oct. 1. Its shares are up 72% over the past year.
As far as Stocktwits followers go, it has just 87, which is tiny compared to PayPal’s (PYPL) at 154,929. The Barchart Technical Opinion indicator is Strong Buy, which makes sense given that it’s the 22nd 52-week high of the past 12 months. Yet only one of the six analysts covering its stock rates it a Buy (3.33 out of 5).
What stands out is its compound annual growth rate (CAGR) of net income and earnings per share over the past 33 years. Since 1990, its CAGR for net income has been 13%, and earnings per share is slightly less, around 12%. There have only been four years when either has contracted.
Its net interest margin averaged 3.32% in the past three fiscal years. According to S&P Global Market Intelligence, of the top 20 U.S. publicly traded community banks in the third quarter, Stock Yards’ NIM of 3.34% was around the middle of the pack.
Could it be higher? Maybe, but its efficiency ratio was 52.71%, the sixth-lowest, indicating that it’s good at controlling expenses.
BrightSphere Investment Group (BSIG)
BrightSphere Investment Group (BSIG) is a Boston-based asset manager with $120 billion in assets under management. On Jan. 1, 2025, it will become known as Acadian Asset Management and trade under the symbol AAMI. It’s changing its name to reflect that it is no longer a multi-brand asset manager. Acadian’s CEO, Kelly Young, will run the company.
BSIG hit its 44th 52-week high yesterday at $30.49, just under its all-time high of $31.17, set on Dec. 6, 2021. Its shares are up 87% over the past year. It, too, has less than 100 Stocktwits followers.
It knows what it’s doing in the asset management industry. Over the past 10 years, 93% of its investment strategies have outperformed their benchmarks. Except for its three-year mark of 86%, it has never underperformed its benchmarks over the past decade.
“When I acquired our stake in BrightSphere, we had seven different affiliates. Over time we sold six of the affiliates to strategic acquirors and kept our crown jewel Acadian. This simplification of our business also allowed us to return $1.3 billion of capital to shareholders via share buybacks and strengthen our balance sheet by reducing debt,” stated Chairman John Paulson about the name change.
Paulson & Co., Paulson’s investment firm, owns 24%. The billionaire is its largest shareholder.
In Q3 2024, its ENI (Economic Net Income) was $122.2 million, 14.7% higher than a year earlier, and its ENI operating margin was 32%, 300 basis points higher than in Q3 2023.
Prudential Plc (PUK)
Prudential Plc (PUK) has hit a 52-week low 24 times over the past 12 months. On Tuesday, its 52-week low of $15.10 was the lowest it’s traded since March 2009. Naturally, the Barchart Technical Opinion is a Strong Sell. The life insurer has just 208 Stocktwits followers.
The London and Hong Kong-based life and health insurance and wealth management company operates in four main markets: Greater China, ASEAN (Southeast Asia), India and Africa. The company spun off its U.S. business in September 2021 under Jackson Financial.
Prudential shareholders received one share of the new public company for every 40 shares in the parent. While Prudential initially held 19.9% of the company, it has since sold its entire position.
Even though it keeps hitting 52-week lows, 15 of the 19 analysts that cover its stock rate it a Buy, with a target price of $29.86, almost double where it trades today.
Prudential reported its Q3 2024 results on Nov. 6. Its APE (annual premium equivalent) sales in the first nine months were $4.64 billion, up 7%, with a 10% increase in the third quarter, while its NBP (new business profit) was $2.35 billion year-to-date, 11% higher than 2023.
APE is the amount of new business premiums written in the period and NBP is the profit from this new business.
As for its Eastspring asset management business, it finished September with $271.4 billion in assets under management, up from $247.4 billion at the end of June. The increase included $4.6 billion of net inflows from third parties.
Of all the insurance markets it’s in, Singapore is the strongest for growth (15% in the first nine months of 2024), although Hong Kong still generates the highest profits of its seven different segments. In the first half of 2024, Hong Kong, Singapore, and Eastspring accounted for 54% of its $1.85 billion in total segment profit.
It trades at just 8.01x its 2024 EPS estimate of $1.93 and 7.4x its $2.09 2025 estimate. Value investors ought to be tempted.
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