The big banks are hitting all-time highs, is there still time to buy?

What an incredible run the big four banks have had! Check out these stats; on average the share price of the big four banks are:

–          up 14% over the past 12 months,

–          up 50% over 2 years,

–          up 80% over 5 years, and

–          up 86% over 10 years, including the devastating effects of the GFC.

The best performer over those 10 years has been Commonwealth Bank of Australia (ASX: CBA) (up 145%), while the worst performer has been National Australia Bank Ltd. (ASX: NAB) (up 20%). NAB’s performance has been hindered by its poorly timed entrance into the UK before the GFC in 2007. This has constrained its share price ever since, while its three rivals have powered to levels well above their pre-GFC highs.

New highs

On Tuesday, Westpac Banking Corp (ASX: WBC) finally surpassed its all-time high of just under $35. Also on Tuesday, rival Australia and New Zealand Banking Group (ASX: ANZ) hit a new all-time high of $34.20. Both have attempted to pass these levels previously but failed to push meaningfully higher.

What do the technical analysts say?

Technical analysts have noted that a sustained break above these levels could signal the start of a new up-trend in the share price, which could quickly propel the shares much higher.

What do the fundamental analysts say?

Fundamentally the share prices of the big four banks look around fair value. There are very few analysts who consider that the big four banks have a long way to run to achieve full value based on their intrinsic value calculations.

Other factors

Besides technical analysis and fundamental factors, are there a couple of other factors that could propel the share prices higher in the shorter term? NAB, ANZ and WBC are all scheduled to pay interim dividends in May, which should support the share price in the short term, while bond and term deposit rates have not recovered from their lows of late-2013.

Foolish takeaway

I believe the share prices of our big four banks can still go higher. Investors are still struggling for choice when it comes to identifying investments delivering above-inflation interest yields, and the fully franked dividend on offer from the banks remains extremely attractive. Long-term investors may be apprehensive about purchasing now, however until a better income option comes available, the big four banks remain solid investments.

Attention bank shareholders!

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Motley Fool contributor Andrew Mudie does not own shares in any companies mentioned. You can find Andrew on Twitter @andrewmudie

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