C-Suite Buy of the Week: Bank Stocks on the Brink of a Home Run

Most people will not notice the importance of this week. They will be far too busy talking about things like AI eating the world, China taking over the government, and Elon Musk ascending to the Interplanetary throne to notice.

The media will not be much help. They will be busy covering the vast conspiracy surrounding the President’s bathroom schedule and the whereabouts of Scaramucci’s mom.

The instant experts of the Internet will be far too busy touting the new nuclear plants that will fit in your pocket and allow you to mine Bitcoin and develop a personal AGI program on the go. The fancier models will apparently have an adapter that allows you to mount the reactor to your dash and simultaneously power your vehicle’s onboard entertainment system.

First, and most importantly, pitchers and catchers report this week. It is, as the saying goes, huge. I already have my tickets to catch the Orioles when they come to town, and I am ready for baseball season.

This week is also the deadline for 13F filings at the SEC. These handy documents contain all the stocks owned by the nation’s money managers, hedge funds, and other big-money types.

Comparing this quarter’s filings to the last gives us a picture of what big money (only some of which is Smart Money) was buying and selling in the final quarter of 2024. The media and instant experts will cover the duplicate half-dozen filings they always cover. We will cover the ones our research indicates are highly likely to help us locate stock ideas that deliver the outsized returns we seek.

One of the investors I have tracked for over a decade filed early this quarter. PL Capital has been investing in bank stocks for a long time with enormous success. When the occasion calls for it, the firm has taken an activist approach to bank stock investing with outstanding results for those of us who piggybacked their efforts.

Thanks to pro-business, no-regulation, and low-tax administration, bank stocks are positioned to be the leading sector for 2025. Relaxing the bank M&A rules is going to set off a tsunami of pent-up demand for buyers and sellers alike.

I could go into a long explanation and examination of each stock, but it will not change any minds. You either understand why banks are an extraordinary opportunity right now or you do not care about banks.

Here are the top three banks that PL Capital has been buying recently:

F.N.B. Corp FNB is a Pittsburgh-based bank with 350 banking offices throughout Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia. FNB already reported earnings and is firing on all cylinders. Deposits and demand both grew, and tangible book value was up double digits year over year. The bank has plenty of capital and the loan portfolio is solid.

BankFinancial Corporation BFIN has 19 branches in the Chicago Metropolitan area. The bank is well-capitalized and has a solid loan portfolio. Given its size and market, I would be less than surprised to see a larger bank that wanted to expand in the Chicago metro market make an offer for this bank at some point in 2025.

Franklin Financial FRAF has 24 branches in South Central Pennsylvania and Northwestern Maryland. Franklin has a pristine loan portfolio, sufficient capital, and trades at a reasonable valuation. Investors who accumulated the stock on pullbacks should do very well over the next year.

All three are in excellent financial shape, have strong loan portfolios, and trade at attractive valuations.

Keeping with the week’s most important news, I noticed that media mogul John Malone shared my excitement at baseball’s return. In January, he acquired shares of Atlanta Braves Holdings BATRK worth over $3 million, adding to his substantial stake in the baseball team. The Braves are one of the most popular teams in baseball, and last year, they drew over 3 million fans to Truist Park. Braves games are a staple on TV and radio stations across the Southeastern United States. The team will be good again this year and is the early favorite to win their division and make the playoffs in 2025.

Atlanta Braves Holdings also owns a mixed-use development around the stadium with retail, residential, office, hotel, and entertainment opportunities known as The Battery Atlanta. The shops and restaurants are a source of year-round revenue and appear to be undervalued by the current stock price.

I have hit (pardon the too-easy pun) home runs with shares of the Cleveland Indians and Boston Celtics in my career, and every time we have a bad market or the Braves suffer a losing streak, I add to my Braves Holdings position hoping lightning strikes a third time.