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Buy Commercial Banks, Says Bove (Pt. 1)

Don't judge all financial stocks by the Lehman-AIG-Merrill meltdown. Commercial banks look strong and will get stronger, according to Richard Bove, managing director at Ladenburg Thalmann, and Jack Bouroudjian, chairman of Capital Markets Technology. The expert strategists offered their outlooks -- and recommendations -- to CNBC.

"We've made the commitment to commercial banks," Bove told CNBC. "In the last few quarters, there's been no major commercial bank that has failed in the United States."

Bove cited three advantages commercial institutions have over investment banks: a core of deposits; diversified investment portfolios; being regulated.

Recommendations:
(See Part Two for Bouroudjian's picks.)

"Last week -- before the [meltdown], of course -- Wells Fargo , U.S. Bancorp , PNC Financial , BB&T , Zions Bancorporation were at all-time high prices," he pointed out. "And if that's not a sign [of strength]..."

Disclosures:

Disclosure information was not available for Bove, Bouroudjian or their companies.

Disclaimer