Signature Bank

Key points from this report:

 

  • We recommend investors add to positions as the stock broke out of a stage-two cup base and is at an all-time high. It is under accumulation and has gained 12% this week.
  • Excellent fundamental and technical ratings: Composite Rating of 99, SMR Rating of B, and EPS Rank of 83. The bank is expected to record EPS growth of 47% for FY21 and 19% for FY22.
  • Crypto segment continues to deliver: The crypto segment has been a key growth driver for the bank. The non-interest-bearing deposits from the segment now constitute 36% of total deposits and have favorably impacted its cost of funds.
  • Excellent room for credit expansion as interest rate increases: The bank has one of the best loan-to-deposit ratios of its peers, which provides excellent room for loan growth once interest rates begin to rise.
  • Leading return ratios: The signature bank has the highest ROE among northeast regional banks in the U.S. and has consistently outperformed its peers.

U.S. Federal Reserve’s Balance Sheet Policies and Their Impact on Markets

Key points from this report:

 

  • The S&P 500 continued to outperform through QE-3 tapering between December 2013 and October 2014.
  • The S&P 500 has corrected during the three months following the termination of the QE programs in all previous instances. Its performance has been closely linked with the monthly rate of purchases made by the Fed during QE.
  • Previous QE programs have resulted in rising inflation and PE ratios, while policy announcements by the U.S. Federal Reserve have historically been met with elevated volatility in the market.
  • The Utility, Health Care, Technology, Transportation, and Consumer Staple sectors led during QE-3 tapering. Technology, Health Care, and Consumer Staple continued to be among the leaders after the termination of QE-3.
  • Stocks of interest outside the U.S. Focus List: Zoetis (ZTS), Icon (ICLR), Fortinet (FTNT), American Water Works (AWK), Eversource (ES), and Norfolk Southern (NSC)