The Zacks Finance sector is presenting attractive opportunities for investors, particularly in the aftermath of the Silicon Valley Bank (SVB) collapse. Many financial stocks are trading at discounted prices, making it an opportune time to consider buying. Regional and foreign banks, which were hit hard by banking fears, are starting to catch investors’ attention. Financial Institutions (FISI), located in New York, stands out with its stock trading at just 5.1X forward earnings and offering strong fiscal 2023 and FY24 earnings estimates. HSBC, headquartered in London, is also an attractive option, with its annual earnings expected to soar and a forward earnings multiple of 5.6X.
In the investment management space, Patria Investments Limited (PAX) is worth considering. The company, which went public in 2021, offers asset management services in Latin America and has seen its earnings projected to increase significantly in the coming years. With a reasonable 11.5X forward earnings multiple, Patria’s stock is enticing. The company’s sales are also expected to climb in the next fiscal years, further supporting its potential for growth.
While caution in the broader financial sector is understandable, it is important to recognize the potential for profitability as interest rates rise. Financial Institutions, HSBC, and Patria Investments Limited all receive a Zacks Rank #1 (Strong Buy) and offer dividends of over 3%. These stocks may be rewarding for longer-term investors.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Nasdaq, Inc.
