Ahead of earnings, we asked analyst Dick Bove which bank stocks he liked most. Know what he told us?

Okay he did say long Citigroup

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[C  Loading...      ()   ] but he also told us he likes long Goldman Sachs

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[GS  Loading...      ()   ] and long Bank of New York

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[BK  Loading...      ()   ].

Here's Bove's reasons:

- Citi should be strong in the quarter because their internals are getting better.

- Goldman Sachs is one of the best companies, if not the best company that I’ve ever analyzed. I’m committed to owning that stock.

- For a really cheap bank stock, Bank of New York looks extraordinarily good.

Bove also tells the desk that he's watching the action in the bank ETFs; some have tripled over the past 12 months. That suggests investors expect earnings to get much stronger and investors bid up bank stocks in anticipation of that catalyst.

However, Bove doesn't expect to see the kind of strength that would justify a 3-fold increase in the about-to-be released earnings reports. 

"Are investors who are buying bank stocks so aggressively expecting disappointing eanrings in the first quarter?" Bove asks.

Maybe not.

As a result he suggests some short ideas - and playing them in pairs.

"If I bought Citi I would sell Wells Fargo

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[WFC  Loading...      ()   ]," says Bove. If I bought Goldman I might ease up on Morgan Stanley

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[MS  Loading...      ()   ]. And if I bought Bank of New York I'd back away from Northern Trust

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[NTRS  Loading...      ()   ]."

 

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Current DateTime: 07:19:37 11 Feb 2012
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Current DateTime: 07:19:38 11 Feb 2012
LinksList Documentid: 26256941

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Trader disclosure: On Apr 6, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Kelly Owns (FXE) Puts; Kelly Owns (FRE); Profit And His Firm Own (AAPL); Profit And His Firm Own (RIMM); Profit And His Firm Own (JPM); Profit And His Firm Own (GS); Jon Najarian Owns (AMZN), Is Short (AMZN) Calls; Jon Najarian Owns (SLB), Is Short (SLB) Calls; Jon Najarian Owns (WFT), Is Short (WFT) Calls; Jon Najarian Owns (AA), Is Short (AA) Calls; Jon Najarian Owns (AKS) Call Spreads; Jon Najarian Owns (X) Call Spreads; Jon Najarian Owns (NUE) Call Spreads; Jon Najarian Owns (RTP) Call Spreads; Jon Najarian Owns (BHP) Call Spreads; Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (RIMM) Call Spreads; Jon Najarian Owns (MBI); Jon Najarian Owns (C) Preferred; Jon Najarian Owns (BAC) Preferred; Jon Najarian Owns (JPM) Preferred; Jon Najarian Owns (MS) Preferred; Jon Najarian Owns (WFC) Preferred; Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (CMC) Call Spreads; Jon Najarian Owns (FCX), Is Short (FCX) Calls; Jon Najarian Owns (GS), Is Short (GS) Calls; Jon Najarian Owns (PDE); Jon Najarian Owns (RIG), Is Short (RIG) Calls; Jon Najarian Owns (RIMM), Is Short (RIMM) Calls; Jon Najarian Owns (WMT) Preferred; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (JPM); Finerman Owns (PDE); Finerman's Firm And Finerman Own (RIG); Finerman's Firm Is Short (SPY); Finerman's Firm Owns (USO); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WMT)

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