While 2010 has been a year for the regional banks, 2011 will be best for the large financials, said Jeffery Harte, managing director in equity research at Sandler O’Neill.
“You’ve got markets generally rotating into equities and what could give some of the big banks—the Citigroups and BofAs—an edge is people looking at [taking on] more risk,” O’Neill told CNBC.
He said that while big headlines and regulatory issues may drive some uncertainty in the giant banks, next year should still be "good" for financials “as long as the economy doesn’t tank.”
“They’re kind of in the eye of the storm with everything that’s happened,” he said of the sector. “Right now, the worst of all worlds have been priced into a lot of the returns, and 2011 is likely to bring things that aren’t as draconian…and that could give them an edge to move up.”
O’Neill’s top picks include:
Bank of America,
Goldman Sachs and
Northern Trust .
Scorecard—What He Said:
- Harte's Previous Appearance on CNBC (Dec. 16, 2010)
More Market Views—Read and Decide:
- Financials Are 'Very Cheap'—Buy Now: Pro
- Large Banks Are a 'Good Long-Term Play': Strategist
- Cramer: Are the Banks Finally Safe to Buy?
CNBC Data Pages:
Harte has investment banking clients who own shares of BAC, C, JPM, BK and NTRS.
Sandler O’Neill provides products or services other than investment banking for BAC, C and JPM.
Sandler O’Neill has received compensation from MS for providing products or services other than investment banking.