5 Bank shares to buy at a huge discount as price increase

Given, this information release consists of dated information. The recently published breakdown of the Berkshire portfolio describes its holdings as of 30 September ^th . Nevertheless, while Mr. Buffett has probably made some changes since then, it shows that he sees some potential in the banking portfolio. This also gives average investors the opportunity to perform the same type of value creation that has made Mr. Buffett a wealthy man. These five financial shares could provide this opportunity:

Bank of New York Mellon Corp. BNK Mellon (NYSE: BK ) appeared in 2007 as a result of a merger between New York Bank and Mellon Financial Corporation. Through the Bank of New York segment, it is one of the oldest banks in the United States. It has also become the world's largest custody bank with over $ 32 billion under custody.

However, the company does not live on its reputation or large asset base alone. Despite the fact that many rivals take over BNY Mellon in size, it wins prices for both its valuable brand and its safety. The bank also became one of only three banks to pass a decisive stress test after the financial crisis in 2008.

However, this security does not protect the bank from ups and downs on the stock market. The BK share is currently trading about 1[ads1]8% below the 52-week high. However, Wall Street forecasts 17.5% profit growth this year. They also expect average annual growth over the next five years to reach just over 8.9%. The latest decline and profit growth has brought the P / E ratio to only 11.6.

Berkshire also increased its BK holdings in each of the last two quarters. With its low number of security responsibilities and the apparent approval of Mr. Buffett, investors have the opportunity to buy one of the safest and most profitable bank stocks that exist at a discount.

Citizens Financial Group (CFG)

] Citizens Financial (NYSE: CFG ) provides consumer and commercial banking services in the Northeast and the Midwest. Providence, Rhode Island-based regional bank has seen its stock slide for most of the year. Early this year, the bank found itself bothered by rumors about involvement in the Paul Manafort scandal. Following this news, the CFG stock began to decline steadily. CFG is now trading more than 25% during the 52-week high.

Despite this question, the CFG stock market looks quite healthy. Analysts forecast profit growth of 36% for the year. While profits will not continue to increase at that rate, analysts still expect double-digit net income growth through at least 2021. Analysts also predict 4% lending growth for the company this year. The average government bond portfolio shows loan growth of around 1%.

The decline in stocks and growth has gathered to give the CFG share a P / E ratio of less than 10.3. In previous years, citizens had traded on multiples ranging from middle to high teens. Furthermore, CFG pays an annual dividend of $ 1.08 per share. This gives new buyers a return of 3% in a dividend that has increased over three straight years.

Given the bank's involvement in a profiled scandal, some will take a tough approach to the CFG stock. But I think that the unusually low P / E, high yield and double-digit profit growth should adequately reduce these risks.

Goldman Sachs Group, Inc. (GS)

Investment banking giant Goldman Sachs (NYSE: GS ) has become one of the more interesting bank stocks. Goldman may have become better known for political activities than for core business. More than one Goldman CEO has been running the Treasury Department. But for all the political impact that may work, it has done little to increase the GS share price.

GS stock trading on levels first seen in 2016. It has also fallen more than 26% from 52 weeks high. Despite this assumption, analysts predict revenue growth of 13.8% by 2018. They also expect earnings to rise by 28.6%. While expecting a flat income growth in 2019, they also expect double-digit profit growth to resume by 2020.

Both this declining share price and increasing profits provide opportunity. As a result of these events, the P / E ratio now stands at about 7.8. This low number could explain why Mr. Buffett has added shares in the GS stock over the past six months. His position now stands at 18.35 million shares.

Investors should also remember that they are still leaders in M ​​& A consulting, equity, interest rate and recent consumer banking. The GS share looks due to the expected growth of its businesses and the low valuation, ready for a turnaround.

JPMorgan Chase & Co. (JPM)

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One of Mr. Buffet's more prominent investments from the previous quarter involved a new stake in JPMorgan Chase (NYSE: JPM ). Although he has admitted to owning some JPM shares earlier, this position has not been shown in previous Berkshire portfolio information. Now, with 35,644 million shares, JPM stocks as Buffetts 10 ^th largest inventory.

JPMorgan has grown into one of the largest financial institutions in the country. Although it has fallen about 10% from 52-week high, it still has a market value of around $ 357 billion. The bank maintains four distinct segments that include consumer bank, corporate bank, commercial bank and asset management.

JPM has also become one of the few bank banks to trade higher than last year. Despite seeing a smaller decline than most peers, it acts at P / E ratio of approx. 11.6. Net income has also increased with a forecast of 33% this year. Analysts predict 8.6% profit growth next year before earnings increases return to double digits for 2020 and 2021.

In addition, investors receive an annual dividend of $ 3.20 per share. While most bank stocks pay dividends, fewer JPM returns yield at almost 3%. In addition, the payment has increased for seven consecutive years. Given profit growth, low majority and high dividend yield of JPM shares, I look at Mr. Buffet's leadership on this stock as a wise move.

Texas Capital Bancshares (TCBI)

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Texas Capital (NASDAQ: TCBI ) serves the banking needs of both medium-sized businesses and wealthy people in Texas. As the name suggests, it operates exclusively in Texas, serving customers in the state's major metropolitan areas. Commercial and commercial property loans account for almost 90% of the company's business.

The TCBI share has lost more than 40% of its value since May. During the summer, Texas Capital announced a loan insurance that came higher than expected. Also much of the drop occurred after its two quarterly reports. In these reports, the company announced that both earnings had been missed. In the latest release, TCBI also missed revenue estimates. These shortcomings occurred because the company failed to capitalize on rising interest rates to the extent that it had hoped.

Despite the bad news, analysts still expect revenue to grow by 47.5% this year and 11% in 2019. Following this massive earnings increase for 2018, the P / E ratio reaches 9.9. This looks like a bargain for a share that has supported an average P / E of 20.4 over the past five years. Top executives announced new positions in the TCBI share after the previous earnings report. I want to make sure that the low P / E and high growth rates motivated these leaders. Due to both the financial calculations and the purchase purchases, this looks like a chance to buy TCBI shares at a significant discount.

As in this letter, Will Healy did not fit into any of the mentioned shares. You can follow Will on Twitter at @HealyWriting.