What to Expect from Large CAP Banks?
James | Jun 22, 2010 | Comments 25
I like banks, I like them a lot. The financial sector is undervalued and valuations are at a discount due to bad news on Wall Street. On the contrary, we are seeing positive trends and financial metrics are improving making this a time to take advantage of these undervalued stocks. Many people are waiting to see how all this news and proposed laws by Congress plays out however I say it’s time to buy now. Small Cap banks or Large Cap 
banks it doesn’t matter as many will continue to succeed. Here are my thoughts on some of the top big named banks.
Top Large Cap Banks
Bank of America (BAC) – Bank of America has so many levers to grow; mortgages, credit cards, investment banking, capital marketing, etc. I like what their CEO is doing and it’s the cheapest of all large cap banking stocks. I think it’s a great investment and a stock you need to buy today. I say $24 is where we heading.
Citigroup (C) – Hedge funds jumping in and government on its way out. Expect this stock to surprise in the next year and longer. $6-$7 is not that far away.
Banco Santander (STD) – I believe Banco Santander will go up +70% over next 18 months. Government may have to force dividend cut and Tim Geither tells them to force tarp but despite that smart moves by management make this stock way to strong and way to big to fail.
Goldman Sachs (GS) – Love this stock long-term, however the media loves to hate on Goldman more than anything else. Despite that once this SEC case blows over and a new management is put in place this stock will soar to new high levels. Goldman never seems to be stopped and their string of success won’t be halted by some SEC case.
J.P. Morgan (JPM) - They are the best run bank on Wall Street led by a great management team. They are similar to BAC and should benefit from all the same products. With $40 billions in reserves and a strong book expect this stock to rise.
Prudential (PRU) - Like this stock a lot got a great global diversification of assets and has many different levers to growth. Worth taking a look at as a potential long-term investment.
Filed Under: Consumer Goods | Financials | U.S. Politics | World Politics | Other Investment Related News • Featured
What do u guys think of State Street(STT)?–it is around $36.00.
Again another very undervalued bank I believe it has the potential to hit $50+.
Banks ALWAYS win: Lessons from The Panic of 1907 -Buy bank Stocks
I hope this not too long of a comment
All this trouble could be averted if we appointed a committee of six or seven public spirited men like J. P. Morgan to handle the affairs of our country”- Woodrow Wilson
I’ve read enough of banking history to know that the banks always win. Does anyone remember the The panic of 1907? Of course not, you’d be dead by now. The panic of 1907, also known as the 1907 Bankers’ Panic, was a financial crisis that occurred in the United States when the New York Stock Exchange fell close to 50% from its peak the previous year……Like Lehman Brothers of 2008 ,Knickerbocker Trust Company collapsed. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered into bankruptcy. The “Panic of 1907″ led to important reforms, such as the formation of the Federal Reserve. Those years were known as the ‘progressive era” where politicians like Woddrow Wilson and Theodore Rooselvelt rallied against the banks and the ‘trusts’ . They demanded legislation that would stop the greed of Wall Street. Roosevelt’s attacks on big industry like US Steel while Woodrow Wison was indignant against the big banks like JP Morgan.
It’s all a show, silly.
Roosevelt’s approved a merger between U.S. Steel and the Tennessee Coal, Iron and Railroad Company. lol.
The Federal Reserve Act will Punish these Banks!!!!! lol. The act was drafted by J.P. Morgan and co.! It benefited the big banks!
I remember reading the Woodrow Wilson Papers one day at the university(his papers were not released until the 1960′s, by then nobody gave a shit) where Wilson says to a group of leaders of the biggest American Banks–he says to them, as I recall–I know you have been hearing me talk smack against you guys in speeches and in the press, but you guys know that’s just for public consumption, and I’m on your side, this legislation will benefit you, so cheers….”
Things don’t change. People actually think things have changed–100 years later–oh, boy –you better sell bank stocks, that dem dare legislation gonna wipe em’ out/—-
hah!
People say the legislation is over 2,ooo pages and we can’t be sure what’s in it–let me, tell ya what’s in those 2,000 pages–loopholes.
banks stocks 1908–1912, 2009–2011. A buy.
Couldn’t have said it better myself, great insight to the past history of banks. Like they always say:
“History always repeats itself”
This case it proves right again.
I see the financial sector taking off in the coming months, undervalued and due for a boom.
Great choices once again James, I’ll be emailing you sometime later this week for more tips.
Thanks
Mike
Thanks I too agree the whole financial sector is undervalued and there are some many great long-term buys out there.
Extremely good advice here James, I agree many big large cap banks the (TOO BIG TOO FAIL TYPES) are hugely undervalued making them great longterm buys for any diversified portfolio.
Glad you liked it.
Great site I too like large cap stocks and think you have great insight into the markets. Will be coming back thanks.
Good finding Carter see ya back soon.
I have to state, you chose your words well. The ideas you wrote on your encounters are well placed. This is an incredible blog!
Chance this blog sure is incredible the more you read the more you like it. James has done a great job.
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FInancials are still very undervalued long-term, worth taking a look at.
These are my favorites..how about other banks such UBS, barclays, credit suisse, RBS etc? do you have analysis on those banks too?
I like DB and BCS so much but a little bit worry about europe crisis..
I like a lot of Small Cap Banks in which I will be talking about either later this week or the beginning of next week. As for UBS I’ll pass just not enough upside for me, Barclays on the other hand is a very strong bank and has potential so definitely on my watch list, Credit Suisse so-so in my book, and RBS not so much seems like there are selling most of their bank. DB I think is too entrenched in the Europe crisis so if I was going to choose I would invest in BCS out of the above. Hope this helps feel free to shoot off more questions.
I too am scared of European banks with the huge exposure to the crisis.
I agree I too would advise staying away from all European financials due to the large exposure.
Darma personally I am not a fan of European financials too much chaos going across the pond.
Hi Stock Market,,
yeah, i would prefer to stay away for now until the crisis gone..but, still looking for opportunity to buy some stocks such DB, BCS, or HBC at bottom..they have strong fundamental like JPM, BAC or C.
Hi Capital Markets,,
yeah, i would prefer to stay away for now until the crisis gone..but, still looking for opportunity to buy some stocks such DB, BCS, or HBC at bottom..they have strong fundamental like JPM, BAC or C.
I like HBC as feel fundamentally they are a strong sound bank.
Sorry for misspelling your name
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