I continue to think the mid-cap and smaller banks are where there is value left to be unlocked. A name that is proving that this morning for me is Huntington Bancshares (HBAN) .
HBAN is a bit smaller than the next tier up (Fifth Third (FITB) , KeyBank (KEY) , etc.). But it still has a big enough reach that I think it's in a great position to move higher as interest rates move up. This morning the company reported earnings -- and the stock is up about 4.5% in midday trading. This points to a decent chance of the stock continuing to see the underlying going up.
I think HBAN, a holding in the Stocks Under $10 portfolio, is going to become a $20 billion bank -- or else it will get swallowed. The July 14 calls -- which have one or two earnings cycles and potentially two Fed rate hikes in advance -- can be bought for $0.90. That's about a 6.25% premium for the next six months. That is not a bad price -- and one that I think could be worth $2.00 when all is said and done.
Trade: Buy to open 1 HBAN July 14 call for $0.90, or better.
At the time of publication, Sebastian had no positions in the stocks mentioned.