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Buy These Banks — Despite New Rules: Stock Picker
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CNBC.com Writer
President Obama reportedly plans to impose a fee on banks in order to recoup the cost of the TARP bailout. But how do you invest in financials when the rules of the game keep changing?
Anton Schutz, president of Mendon Capital, and Chris Mutascio, managing director and bank analyst at Stifel Nicolaus, shared their insights.
“There’s no doubt that there’s noise everyday,” Schutz told CNBC.
“[But] it’s important to note that the multiples on these banks are so low compared to their earnings capacity…So to some extent on the bigger banks, these are very inexpensive.”
In the meantime, Mutascio said investors should buy banks that have paid off the TARP, recapitalized and have high loan loss reserves.
“We think those banks will return to normalized earnings sooner and they will be higher,” he said.
Mutascio said he specifically likes Bank of America [BAC
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Top Financial Firms:
Goldman Sachs [GS
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JPMorgan Chase [JPM
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Citigroup [C
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Morgan Stanley [MS
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Disclosures:
Mutascio has investment banking clients who own shares of BAC, WFC and STI.
Stifel Nicolaus or an affiliate managed or co-managed a public offering of securities for Bank of America and Wells Fargo in the past 12 months.
No immediate information was available for Schutz or his firm.
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