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Grab These 3 Banks Stocks, Says Analyst

Friday, 24 Sep 2010 | 5:37 PM ET

In a week that saw the Dow jump some 250 points - one sector was left out in the cold: the financials.

Bank stocks traded flat or down in the last 5 days led by Goldman Sachs and Morgan Stanley, which each shed 4%, respectively.

Despite the miserable performance, widely followed analyst David Trone of JMP Financial likes 3 stocks in the space - they are Goldman Sachs, Morgan Stanley and Jefferies, all companies that have warned about terrible trading environments.

Huh?

Trone tells the desk in a live interview although trading activity has ebbed - he believes these stocks are already discounted for that.

And he thinks volumes will come back. “We are on a path of general markets recovery but these things are not liner."

He also likes these 3 names because he believes they all dodged the bullet fired by Basel III and financial reform.

What's Wrong with Banks?
Financials have been the worst performers this week, with David Trone, JPM Financial.

However he’s not so bullish on JPMorgan and BofA .

”They’re going to get hit right in the chest by that bullet and it’s going to be hard to get outperformance in those names. Basel makes lending a lower return business.”

Check out our entire conversation with David Trone. Watch the video now!


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Trader disclosure: On Sept. 24th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Finerman’s firm own (ANF); Finerman & Finerman’s firm own (BAC); Finerman & Finerman’s firm own (JPM); Finerman owns (GOOG); Finerman’s firm own (PBR); Finerman & Finerman’s firm own (BBY); Finerman’s firm own (TJX); Finerman’s firm own (TGT); Finerman's firm is short (IYR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russell 2000 puts; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST); Pete Najarian owns (AMZN) call spreads; Pete Najarian owns (NTAP) call spreads; Pete Najarian owns (WFC) put spreads; Terranova Owns (POT), (APA), (AAPL), (ARUN), (BMO), (C), (IBM), (HES), (JOYG), (XBI), (FTO), (OXY), (ORCL), (PEP), (RSH), (SU), (RIG), (UPL), (VRTS); Karabell owns (GS), (RIMM), (AAPL); Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST)

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (AMGN)
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DLUEY)
Virtus Investment Partners own more than 1% of (DRYS)

For Michael Block
***No Disclosures***

For David Trone
JMP Securities makes a market in (BAC), (BLK), (C), (DUF), (ETFC), (EVR), (GLCH), (GS), (GHL), (JPM), (JEF), (KBW), (LAZ), (LM), (MS), (NMR), (PJC), (RJF), (SF), (AMTD), (SCHW), (TRAD), (WFC), (OXPS)

CNBC.com with wires.

  Price   Change %Change
BAC
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GS
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JPM MLP ETN
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MS
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