Is Berkshire Hills Bancorp Inc. (BHLB) the best small cap bank stock to invest in now?
Recently I published the list 10 Best Small Cap Bank Stocks to Invest Now. In this article, we’ll take a look at where Berkshire Hills Bancorp (NYSE: BHLB) is currently investing in against other Best Small Cap Bank Stocks.
According to the future of market research, the global banking market was valued at $35.4 billion in 2024. With a CAGR of 4.55%, it is expected to grow from $37.17 billion in 2025 to $55.255 billion by 2034. McKinsey and the company’s 2024 Global Banking Annual Review states that the global banking industry ranks at the bottom of all sectors, consistently displaying multiples of books from low prices. This raises many questions about the industry’s long-term value creation.
However, over the past two years, the sector has seen sound profitability, capital and liquidity since the global financial crisis of 2007-2009. These profits are attributable to surge in interest rates, which leads to some questions about their sustainability. However, without these benefits, the return on tangible capital (ROTE) for many regions is below the cost of capital. The banking market needs to focus on structural change and operational efficiency to counter these concerns. Analyzing high-performance banks shows that they are often attributable to specific segment selection and strategic scaling within the value chain and geographically.
Jason Goldberg, a senior equity analyst at Barclays, joined CNBC’s “Scoebox” on March 20th to discuss the status of the banking sector. Goldberg spoke about recent bank stock volatility, which first rose after the presidential election, but then declined. He believes the bank’s ratings are currently below the historic average. When asked about whether the basic environment for banks had shifted during recent rally, Goldberg explained that the reason for the sector’s initial surge remains the same. This is due to market enthusiasm for the growth-enhancing agenda and expectations for a decline in regulations. He acknowledged the existence of short-term uncertainty regarding taxes, immigration and tariffs. However, he affirms that these issues will soon be resolved and that there will be a continued increase in corporate borrowing, investment, M&A and IPO activities.
Overall, Goldberg believes that growth in loans, increased merger activities and potential reductions in regulations will all contribute to the optimistic banking sector.
Sieve through Finviz Stock Screener and compiled a list of all bank stocks that were trading between $300 million and $2 billion. After that, they chose the 10 most popular shares among elite hedge funds, and analysts were bullish. Stocks were ranked in ascending order of the number of hedge funds that contain stocks in them as of the fourth quarter of 2024. Hedge fund data was sourced from Insider Monkey’s database, which tracks the movements of more than 900 elite money managers.
