Regional Financials: SVB Financial Group (SIVB)
This final bank isn’t even on SNL’s list of top bank stocks. However, it is on Forbes’ 2014 list at No. 7, one behind First Republic. And I’ve been a big fan for some time.
In December, I picked SIVB as one of five stocks to buy for the next 20 years. I just love how it services entrepreneurs in Silicon Valley and beyond. With total focus, SIVB helps businesses grow — and as a byproduct of that, it has too. Since the first quarter of 2011, its average loans outstanding have grown 90% to $10.1 billion through the end of 2013, much of this growth due to venture capital innovation. Since 2009, SIVB’s earnings per share have grown over 600% thanks to substantial increases in both interest and non-interest income.
It’s not surprising then that SIVB stock has achieved an annual total return of 41% over the past five years through April 23. In every period it’s easily outdistanced its regional bank peers as well as the S&P 500. Up 7.8% year-to-date, it’s given back two-thirds of its 2014 gains in the month of April as investors worry its long run is coming to an end. While some smell fear I believe any further correction in late April and into May presents a big buying opportunity for investors.
Of all the California financials you could own, SIVB is the one I’m most excited about. Sure, it might not be on the buy list of many analysts because it has come so far, but succeeding hardly means you can’t keep succeeding.
As long as SIVB sticks to its knitting, I see happy times ahead for its shareholders.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.