This is bottom fishing with a 300-foot line.

Some investors and analysts are turning bullish on banks and thrifts in, of all places, New England.

What abounds, they say, are thrifts with plenty of capital, dwindling bad loans, and stocks that trade at less than 50% of book value - a better investment sceneario than California, for example.

Stocks Are 'Very Cheap'

"The banks and thrifts here are very cheap, and nonperforming assets are coming down," said Bruce Herring, who runs Fidelity Investment's Select Financial Services Fund and has been investing in the region for the past year.

Fidelity already owns large chunks of stock in Shawnut National Corp. and Bank of Boston Corp., two banks that may be on the mend now that they have reduced nonperforming loans.

Other portfolio managers are reaching the same conclusion about thrifts.

Some Worth Watching

In the past month, Gerard Cassidy, an analyst with Tucker Anthony in Portland, Maine, has issued buy recommendations on two small Massachusetts thrifts, Grove Bank and Neworld Bancorp.

In addition, Mr. Cassidy says 11 other New England thrifts are worth watching.

The list includes BankWorcester Corp., Society for Savings Bancorp, Sterling Bancshares, and Eastern Bancorp. All but one of the 11 sell for less than half of stated book value.

Profits Seen for '92

"These thrifts are in the process of getting healthy," said Stanley T. Wells, an analyst at Keefe, Bruyette & Woods Inc. in Hartford, Conn.

Mr. Wells expects about half the thrifts he follows to lose money this year, but in 1992 he projects a marked improvement with or without a turnaround of the regional economy.

The lowest discount rate in 27 years should help, by widening margins and stimulating new loan demand.

Meanwhile, some of these thrifts have sliced nonperforming loans and added productive assets at minimal risk by cutting deals for seized thrifts.

A few already have capital ratios that exceed 10%, more than twice the required level.

"That's what makes these companies attractive," said David Ellison, who runs Fidelity's Savings and Loan fund and has invested in more than a dozen local thrifts. "You can afford to wait six months for a profit - these guys don't have to raise capital and dilute you to get back to normal earnings."

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