Using my broker’s trading software, I performed a scan to come up with a list of small cap bank stocks from which I would further refine by only keeping those stocks that had been listed on an exchange for 20 years. My basic theory behind this is that if a bank stock has lasted for 20 years, through thick and thin and multiple economic and financial crises, then its likely that the management knows what it is doing and and has a conservative credit culture.
Here were my parameters for the scan: all stocks categorized under “Depository Institutions”; price > $5; volume < 360,000; market cap in between 49M and 6,300M; and EPS > -0.1. This search pulled up over 25 stocks, and from there I picked the stocks with trading histories of 20 years or more. Here is the end result:
I think this is a pretty good list of small cap bank stocks with which you can launch a more in-depth investigation. Like I said before, because these stocks have been listed for 20 years or more, I think chances are good this fact signifies that the management and the credit culture of these banks are very good.
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