Operating in the fast-growing areas in the West, Zions (ZION) will benefit greatly from a stronger-than-expected economy. Although shares of Zions have doubled in value since late 2011, the stock trades for just over 1 times book value. Again, to the extent economic growth hits 3% or more, a market valuation of closer to 2 times book value is more than appropriate.
Analysts at the moment expect Zions to grow profits by 15% in 2014 thus book value will be increasing as well. With bank stocks trading for book value one can safely assume that we are far from bubble conditions. Leading the continuing bull rally will be bank stocks like Zions.