Is Huntington Bancshares a Bargain Here?

With shares of Huntington Bancshares Incorporated (NASDAQ:HBAN) trading at around $7.00, is HBAN an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

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Huntington Bancshares recently reported Q4 EPS of $0.19 as well as FY2012 EPS of $0.71. Q4 net income came in at $159.30 million, which is a 34 percent increase from the same quarter last year. FY2012 net income came in at $609 million, which is a 19 percent increase over last year. These positive results can be attributed to an increase in mortgage banking revenue, a rise in securities gains, an increase in the sale of loans, and more. There is more information in the Earnings section.

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While the situation looks good right now, there will be some challenges going forward. The biggest challenge will be increased expenses. In regards to net interest margin, it’s expected to rise slightly in 2013, but there might be pressure in that area as well.

Huntington Bancshares announced that it will maintain its quarterly dividend of 4 cents per share. Margins are good, cash flow is solid, and the Forward P/E is just 10.77. So far, everything looks good, but let’s take a look at some important numbers prior to forming an opinion.