Susquehanna (SUSQ) – Lucky We Use Ticker Symbols
There are few companies that are as hard to spell or pronounce as Susquehanna Bancshares (NASDAQ: SUSQ). Fortunately, stocks are traded by their ticker symbols and not their names so lucky for SUSQ. In any case, I am spotlighting SUSQ today for a variety of reasons. First, and most obvious, their stock went up 4.1% closing at $6.08 today. Secondly, their intrinsic value is high — a book value of $19.20 per share and ttm P/E of 36 [...]
Yes, it’s true that a P/E of 36 is high but considering most banks don’t even have P/E’s because they’re losing money these days, that’s actually a positive. Let’s not forget that SUSQ had a 52-week high of $20.35. They’ve been beaten down lately because of deteriorating commercial/construction loans, higher FDIC insurance costs, and increases in provision for loan losses. They missed their EPS estimates last quarter and got punished pretty badly as a result. But I think the worst is over for SUSQ.
As the capital markets improve, SUSQ will benefit from it just like any other bank (improved access to liquidity, improvements in loan porftolio, lower FDIC fees, etc). They have a strong balance sheet and no imminent danger of falling below any regulatory capital ratios. Their loan portfolio might get a little worse before it gets better but they have plenty of cash and liquidity to get them through it. I believe they’re a solid investment. If you look 3-6 months down the line, I honestly think that SUSQ will be trading much higher than their $6.08 close today.
This bank is a very good bank BUT It needs change at the top.