Australia and New Zealand Banking Group shares are down 5% this month: Should you buy?

So far in September, the S&P/ASX 200 (INDEXASX: XJO) has fallen hard, putting the market less than one percentage point higher than where it started on January 2, 2014.

The latest falls have been hardest felt in the banking sector where valuations were (and to some extent still are) getting excessive.

Regional giant Australia and New Zealand Banking Group (ASX: ANZ) hasn’t been immune from the broader market sell-off, dropping around 5.6% in just 24 days.

No doubt some shareholders would be considering an exit from the bank altogether. Conversely investors are likely wondering if now could be a good time to grab some bank shares on the cheap. After all, the bank does trade on a P/E multiple of just 13, whilst the broader market trades above 15.

Buy, Hold, or Sell?

ANZ shares are still not cheap enough to justify a solid buying opportunity. In fact, at over $31 per share, I continue to believe it’s still quite expensive. Whilst it might not be ‘dangerous’ to buy at these levels (after all, it is a quality bank), I believe patient investors will be rewarded with a lower entry point in the future. This is likely to occur when bad debts balloon and we suffer an actual market correction. But if we don’t get that opportunity, it’s important to remember patience doesn’t lose us money.

However, if you don't like to wait for things you should know our top analyst, Scott Phillips, recently identified one cheap but growing small-cap ASX stock with a 6.3% grossed-up dividend yield which I think is a STANDOUT buy today. If you're interested in knowing its name, just click on the link below, enter your email address and we'll send you the FREE report on his top dividend stock idea for 2014 - 2015!

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the companies mentioned in this article. 

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