Analysts have begun pulling back on New England bank and thrift stocks on concerns that their long recovery, capped by a recent rally, is reaching maturity.
Christoph Kotowski of Oppenheimer & Co. on Wednesday sliced his investment rating for Fleet Financial Group, Providence, R.I., to "market performer" from "buy" because of the stock's price.
Fleet shares, which slipped $1.875 to $39.125 on the downgrade, had been up 22% this year. Much of the gain was concentrated in the past six weeks.
On Monday and Tuesday, Fleet set successive new 52-week highs, closing Tuesday at $41.
On Tuesday, Stephanie H. Giroux of PaineWebber Group Inc. reduced three New England stocks to "attractive" from "neutral" on the the basis of their prices. They were Concord Cooperative Bank, Acton, Mass.; Boston Bancorp, South Boston, Mass.; and Medford Savings Bank, Medford, Mass.
Most New England bank and thrift stocks were down on Wednesday amid the overall retrenchment in the market. Shawmut National Corp., Hartford, Conn., was off 50 cents to $23, and Bank of Boston Corp., was down 12.5 cents to $26.879.
"New England has been the hot market, both in the larger names like Fleet and a lot of the takeover names," said Frank J. Barkocy, senior bank analyst at Advest Inc., Hartford, Conn.
"It's not surprising to see some profit taking going on at this point," he said. "No apology needs to be made for that. Hopefully, quite a few investors intend to take profits and play the game again."
During May, he noted, shares of Bank of New Hampshire Corp., Manchester, gained 23.8%; Washington Trust Bancorp, Westerly, R.I., improved 22.8%; and Merchants Bankshares, Burlington, Vt., rose 16.7%.
Among thrifts, Braintree Savings Bank, Mass., spurted 26%; Dime Financial Corp., Wallingford, Conn., gained 21.7%; Abington Savings Bank, Abington, Mass., rose 18.8%; and Famil Bancorp., Haverhill, Mass., was up 18.1%.
"Acquisitions by Shawmut National Corp. and Citizens Financial Corp., lifted all boats, if you will," Mr. Barkocy suggested.
"All it will take is another acquisition or two in the market to cause this momentum to rekindle," he said.