"Even among the broad-based market carnage of the past year, regional banks with heavy real estate exposure have been notably poor performers," notes turnaround expert George Putnam.

In The Turnaround Letter, he explains, "While investors are still wary of this group, there are cases where the market has overreacted and the stocks will eventually rebound dramatically." Here, he looks at four favorite regionals.

"Many regional banking stocks are now trading at a small fraction of their 'book value.' In more normal times, most banks will trade for two to three times book value and sometimes more.

SunTrust Banks (NYSE: STI) closed at $43.97 Thursday. STI July option implied volatility of 64 is above its 26-week average of 41 according to Track Data, suggesting larger price uncertainty.

PNC Financial Services (NYSE: PNC) closed at $59.73 Thursday. PNC July option implied volatility of 41 is above its 26-week average of 35, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Amazon.com (NASDAQ: AMZN) will report 3rd quarter earnings per share (EPS) on October 23rd:

AMZN November option implied volatility of 67 is above its 26-week average of 41 according to Track Data, suggesting that traders are positioning themselves for larger price risks.

SunTrust Banks (NYSE: STI), as of June 29th, STI had total assets of $180.3 billion and total deposits of $122.9 billion:

STI will report EPS on October 18th. STI call option volume of 3,015 contracts compares to put volume of 3,223 contracts. STI November option implied volatility of 32 is above its 26-week average of 26 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY: Dominion Resources (D), Digene (DIGE) and Deutsche Bank (DB) were today's noteworthy downgrades:

• BMO Capital downgraded shares of Dominion Resources Inc. (NYSE: D) to Market Perform from Outperform citing the sale proceeds for its onshore U.S. E&P properties that were below expectations.
• Digene Corp. (NASDAQ: DIGE) was downgraded to Sell from Neutral at Ferris Baker Watts based on the acquisition by Qiagen (NASDAQ: QGEN). Digene was also downgraded at SummerStreet to Neutral from Buy, as the firm views the Qiagen's acquisition for $1.6B as reasonable.
• Deutsche Bank (NYSE: DB) was downgraded to Underweight from Neutral at JP Morgan, as the firm sees better value in traditional credit-exposed banks.

OTHER DOWNGRADES:

• Norsk Hydro (NYSE: NHY) and BP PLC (NYSE: BP) were downgraded to Hold from Buy at Citigroup.
• Quiksilver Inc. (NYSE: ZQK) was downgraded to Neutral from Outperform at Robert W Baird due to valuation.
  
• Banc of America downgraded shares of SunTrust Banks Inc. (NYSE: STI) to Neutral from Buy on valuation as they believe further sales of Coke may not be very accretive to EPS.
• LifePoint Hospitals Inc. (NASDAQ: LPNT) was downgraded to Hold from Buy at Jefferies based on valuation.
• Clear Channel Outdoors Holdings Inc. (NYSE: CCO) was downgraded to Hold from Buy at DBAB on valuation.
• Matrix USA downgraded shares of Apollo Group Inc. (NASDAQ: APOL) to Hold from Buy to reflect rising costs and lower enrollment rates.
• Matrix also downgraded True Religion Apparel Inc. (NASDAQ: TRLG) to Hold from Buy on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).