Over the last six months, Wintrust Financial shares have sunk to $116.91, producing a disappointing 11.2% loss - worse than the S&P 500’s 1.6% drop. This might have investors contemplating their next move.
Given the weaker price action, is now a good time to buy WTFC? Find out in our full research report, it’s free.
Why Do Investors Watch WTFC Stock?
Founded in 1991 as a community-focused alternative to big banks in the Chicago area, Wintrust Financial (NASDAQGS:WTFC) operates community banks in the Chicago area and provides specialty finance services including insurance premium financing and wealth management.
Three Positive Attributes:
1. Net Interest Income Skyrockets, Fueling Growth Opportunities
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
Wintrust Financial’s net interest income has grown at a 18.1% annualized rate over the last four years, much better than the broader bank industry. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Wintrust Financial’s astounding 10.8% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
3. TBVPS Growth Demonstrates Strong Asset Foundation
We consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation.
Wintrust Financial’s TBVPS increased by 9.5% annually over the last five years, and growth has recently accelerated as TBVPS grew at a decent 10.8% annual clip over the past two years (from $64.22 to $78.83 per share).
Final Judgment
Wintrust Financial is an interesting business with potential. With the recent decline, the stock trades at 1.2× forward P/B (or $116.91 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
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