U.S. Bancorp (USB)

Why are posters compelled to post under several "names"?
Why do these posters ask and respond to posts/questions between themselves?
I'd appreciate a reply from:
None
JHB
but not at the same time.

Ivan K. Wu Ivan K. WuFollow(184 followers)
Long only, value, contrarian, long-term horizon
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Summary

Superior returns are obtained by discounting the obvious and betting on the unexpected.

By now, USB's strong efficiency ratio, high ROE, and disciplined management are common knowledge and unlikely to generate significant alpha. Rising rates are also a crowded trade.

However, potential catalysts unique to USB's business are being ignored by the average investor.

I. Business Overview

Over a year ago, I wrote my first SA article ranking the top 10 U.S. retail banks by assets. My purpose was to better understand the competitive landscape and what each player's relative strengths were. I then delved deeper into the most promising candidates to evaluate their attractiveness as long-term investments.

U.S. Bancorp (NYSE:USB) was a curious case. In terms of assets, it's about a quarter the size of the Big Four. Yet in an industry with a high regulatory burden, it had the lowest five-year average efficiency ratio of 53.17%. To make things stranger, its five-year revenue growth was relatively flat at 2.85%, yet it managed to earn an average ROE of 15.46% during that period, again blowing away its competition.

All this led me to suspect that this was too good to be true. But having taken a closer look at its balance sheet, I was clearly mistaken. U.S. Bancorp has and continues to maintain unique advantages, largely due to the modest size of its book and its relentless underwriting discipline.

From a competitive standpoint, USB's cost advantage creates a widening moat in the down-market, while its low risk balance sheet allows it to pursue opportunistic deals against its larger competitors.

In other words, U.S. Bancorp is a base hitter in the minor leagues with a skill set that translates well into the majors. It straddles the line between community banking and the more competitive segments on the national level.

II. What has the market priced in?

That being said, with the recent runup in financial stocks, my arguments above have likely already been priced into the market. The following slide is no longer news to anybody:

HEY BOARD : You can see the JHB just continues to post lies and continues to harass. Here are FACTS which he never uses. He continued with his current post on 5/22. "
JHB
JHB
22 hours ago

Another harassing post by the pervert(KOH,KOP) goes to the garbage dump. Thanks for making my day.

LOOOOLLLLLLLLL LOL LOL