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7 Bank Stocks We Like Now: Analysts

Major banks posted mixed results on Wednesday, reflecting the industry's slow recovery. Should you invest in regional banks instead of the big ones? Craig Seigenthaler, senior analyst at Credit Suisse, and Matt McCormick, banking analyst and portfolio manager at Bahl & Gaynor Investment Counsel, shared their outlooks.

“I’m a little bit more in favor of the regionals, but I’m really in favor of the custody banks,” McCormick told CNBC.

“What the markets are doing is digesting a lot of these numbers and they’re also understanding that with gridlock soon to be happening, that the second stimulus will probably not happen," he said.

"The juice that’s been helping propping up the market, once they pull that out, it’s causing some investors to be concerned.”

McCormick said he also likes Morgan Stanley as a longer-term play.

In the meantime, Seigenthaler said investors should focus on the “very cheap, distressed trading regional banks.”

“[They have] a lot of upside and some of these have 80 to 100 percent upside over two years, such as Fifth Third, SunTrust,” he said. “These banks that are trading at around tangible book value and they’re trading around six times normalized earnings.”

Seigenthaler Likes:

Fifth Third Bancorp

SunTrust Banks

First Horizon National

McCormick Likes:

Bank of Nova Scotia

T.Rowe Price

Northern Trust

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Disclosures:

Siegenthaler does not own shares of FITB, FHN, STI or MI. However, Credit Suisse acts as a market maker or liquidity provider in these equities securities.

No immediate information was available for McCormick or his firm.

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