“Look at Morgan Stanley,” says top trader Pete Najarian. There’s strong call buying in the 19. That’s an expectation the stocks has more lift!”
Najarian and other market pros are growing incrementally more bullish on banks stocks, after more earnings came in better than expected and suggested that the worst may be over for beleaguered financials.
Although Morgan Stanley posted a quarterly loss, the firm managed to topped expectations in a big way. The loss, which was equivalent to 15 cents per share, was far smaller than the 43-cent loss that Wall Street had predicted.
And the outlook was good.
CEO James Gorman said in a statement that Morgan Stanley has been "addressing a number of outstanding strategic and legacy issues" for the past year, and was now "well positioned to deliver improved returns to shareholders in 2012 and beyond."
And it’s not just Morgan - the Street also turned incrementally more optimistic about Bank of America.
"I'm seeing a lot of April 7 call buying. And the March 8 calls also continue to be very active. The Street thinks this one is going higher, too," observes Najarian. Widely followed bank analyst Dick Bove has a price target on BofA of $14. (Click here to go to "Dick Bove Makes Fundamental Bull Case for Banks.")
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The bullish sentiment follows a quarterly report fromBank of America in which BofA reported $2 billion net income for the fourth quarter compared with a $1.2 billion loss in the same quarter a year ago. Revenue was $25.1 billion, up 11 percent and higher than the $23.7 billion estimated by FactSet.
And Najarian says investor enthusiasm isn’t just limited to American banks.
“Institutional investors are going after the Feb 25 calls into March 27 calls in Credit Suisse. Looks like money managers are starting to see value in banks all over,” Najarian says.
What do you think? We want to know!
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Trader disclosure: On Jan. 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: P. Najarian is long AAPL calls; P. Najarian is long BAC calls; P. Najarian is long C; P. Najarian is long MS calls; P. Najarian is long MSFT; P. Najarian is long INTC; J. Najarian owns AAPL; J. Najarian owns AKS; J. Najarian owns GS; J. Najarian owns NFLX; J. Najarian owns CDR; J. Najarian owns JNPR; J. Najarian owns EBAY; J. Najarian owns MSFT; J. Najarian owns KBH; J. Najarian owns XHB; Weiss is long BRCM; Weiss is long SNDK;
Weiss is long ETP; Weiss is long EUO; Weiss is long QCOM; Weiss is long F; Weiss is long GM; Weiss is long CSC; Weiss is long DVN; Weiss is long WLT; Weiss is long CAF; Weiss is long MOS; Weiss is long NS; Weiss is long HPQ; Weiss is long RIMM; Weiss is long WLP; Weiss is long SVU; Weiss is long MDRX; Weiss is short FXA; Kelly is long XHB; Kelly is long USG; Kelly is long MHK;
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