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Cramer: Best Opportunity in Hotter Sector

Thursday, 7 Mar 2013 | 6:16 PM ET
Opportunity in Record-High Market?
As the rally rolls on, Mad Money host jim Cramer gives his thoughts on whether opportunities exist in this record-high market.

"You know I believe that 2013 is the year of the regional bank," said Jim Cramer on Thursday's broadcast.

But next week a watershed event looks to be particularly positive for one of the many banks in the sector.

"I'm talking about SunTrust (TICKER:STI), said Cramer.

The Fed releases stress tests next week and although it will be relevant for the group as a whole, Cramer thinks the results will be particularly meaningful for shareholders of SunTrust.

"Last year, SunTrust was one of just four major banks to fail this very stringent stress test," Cramer explained. That meant unlike many other banks, SunTrust had not been allowed to raise its dividend or buyback shares.

"But I expect that this year, SunTrust will pass the stress test," Cramer said.

And that puts dividend increases and buybacks squarely on the table.

"Also getting a go ahead from the Federal Reserve this time around would be an important symbolic gesture, too, like giving the company a Good Housekeeping Seal Of Approval."


Paul Hilton | Bloomberg | Getty Images

Beyond the stress tests, Cramer said there are other things to like about this stock.

"SunTrust has major exposure to housing, especially in the Southeastern part of the country," Cramer said. "And in the markets where SunTrust has the most share, housing prices have been rebounding dramatically."

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Also, he said , "SunTrust has been growing its deposit base, especially lower cost deposits, while trimming its exposure to high-cost deposits. And management, has rolled out a new, aggressive cost-cutting program."

All told, "after we get the stress test results on Thursday of next week, I think investors are going to jump all over SunTrust," Cramer said.

Considering all the catalysts "I think SunTrust presents the best buying opportunity in one of my favorite sectors for 2013. "

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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