Banks Seeing 'Moderate Uptick'—Buy These: Pros
CNBC.com Writer
JPMorgan, first of the major banks to report earnings, posting a better-than-expected profit Wednesday, helped by lower loan losses in its retail and credit card units. So is this the time for investors to buy banks?
Matt McCormick, banking analyst and portfolio manager at Bahl & Gaynor Investment Counsel, and Chris Kotowski, senior research analyst at Oppenheimer, shared their insights.
“We’re seeing a moderate uptick in the overall health of the banking industry, but I’m still very much concerned with the money-centered banks, based upon regulatory concerns,” McCormick told CNBC.
He said he prefers Canadian banks that aren’t facing the issues that plague U.S. banks.
“We want ones that have earnings growth and have the ability to loan,” McCormick said. "And I don’t think you’re going to see loan growth until you see the jobs market improve.”
In the meantime, Kotowski said he is beginning to see loan trends in banks turning.
“We’re going to be at this point where you’re in-between, but that’s very natural and normal at this period in the cycle,” he said. “After a recession ends, there’s about another 14 months of loan shrinkage—that’s the historic average.”
Kotowski Likes:
JPMorgan Chase
Citigroup
Wells Fargo
McCormick Likes:
Scotiabank
Canadian Imperial
Cullen Frost Bank
Northern Trust
T. Rowe Price
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Scorecard—What They Said:
- Kotowski's Previous Appearance on CNBC (Sept. 30, 2010)
- McCormick's Previous Appearance on CNBC (Sept. 28, 2010)
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More Stock Analysis & Opinion:
- 8 Attractive Large-Cap Dividend Picks: Strategists
- Expect Bank Earnings to Be Lower This Quarter: Bove
- 9 'Left for Dead' Stocks with Analysts’ Approval
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Disclosures:
Kotowski owns shares of GS, JPM and MS.
No immediate information was available for McCormick or his firm.
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