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Billionaires Buy Bank Stocks, Should You Buy Too?

With banks again under scrutiny, it’s interesting to note that a few widely followed investors added to their exposure.

According to the latest 13F filings, David Tepper’s Appaloosa Management added new positions in Bank of America and Citigroup, though it’s important to note, that’s as of March 31, 2012.

Also, Leon Cooperman established new positions in Citi, BofA and Wells and he increased his position in JPMorgan, though again, that’s as of the end of Q1.

What should you make of the moves?

Strategy Session with the Fast Money traders

Trader Brian Kelly thinks these Wall Street Whales were probably putting money to work in banks because, “for the first time since 2009 the banks were trading at book value – that’s a bullish signal.”

However, he adds that with theEurope situation flaring up again and JPMorgan landing in the hot seat, it’s unclear if they’ve pared or hedged their positions.

Despite potential headwinds, Kelly still likes the space, but prefers playing it with Wells Fargo as well as the regionals, on the belief they have more exposure to the relative strength in the US.

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Trader Steve Grasso is also bullish on Wells as well as two regionals USB and BB&T. “You can put more money into these stocks,” he says, “but remember 2/3 of all stocks trade with the overall market. If the S&P doesn’t hold 1340 – there’s no reason to believe they won’t go lower.”

Both trader Stephen Weiss and trader Scott Nations added to their positions in JPMorgan. “I think JPM is a great bank dressed up as a sick bank,” says Nations.

“JPMorgan is so strong,” adds Weiss.

Both pros think the sell-off is an opportunity, despite the $2 billion trading loss and related controversy.

“That $2 billion loss translates into less than .75/share – I think the stock trades up to $40, $41 – by the end of June,” says Nations.

Although no US bank meets her investment criteria, Patty Edwards agrees that if you have an appetite for risk, JPMorgan looks attractive. “The chart looks good,” she says. “The stock looks like its finding support and it’s above the 200-day.”

Posted by CNBC's Lee Brodie



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Trader disclosure: On May 15, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephen Weiss is long AIG; Stephen Weiss is long JPM; Stephen Weiss is long VZ; Stephen Weiss is long WLP; Stephen Weiss is long NAV; Stephen Weiss is long HK; Stephen Weiss is short CHK; Stephen Weiss is short JCP; Stephen Weiss is short JEC; Brian Kelly is long T; Brian Kelly is long VZ; Brian Kelly is long KRE; Brian Kelly is long WFC; Brian Kelly is long USG; Steven Grasso is long ASTM; Steven Grasso is long AVAV; Steven Grasso is long BA; Steven Grasso is long D; Steven Grasso is long FRO; Steven Grasso is long LNG; Steven Grasso is long MHY; Steven Grasso is long NUAN; Steven Grasso is long MO; Steven Grasso is long PFE; Steven Grasso is long S; Steven Grasso is long XLU; Steven Grasso is long ZAZA

For Jon Najarian
Jon Najarian is long call spreads DMND
Jon Najarian is long call spreads AH
Jon Najarian is long call spreads NFLX
Jon Najarian is long call spreads VALE
Jon Najarian is long call spreads V
Jon Najarian is long call spreads MAKO
Jon Najarian is long call spreads GRPN
Jon Najarian is long call spreads GM
Jon Najarian is long GLUU
Jon Najarian is long CIGX
Jon Najarian is long DDMD
Jon Najarian is long CME
Jon Najarian is long CBOE

For Alan Rifkin
Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from HD
Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from LOW
Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from HD
Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from LOW
Company has been an investment banking client of Barclays: HD
Company has been an investment banking client of Barclays: LOW
Company has been a non-investment banking client of Barclays: HD
Company has been a non-investment banking client of Barclays: LOW

For Deborah Weinswig
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of JCP
Ciitigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of TGT





CNBC.com with wires.

Symbol
Price
 
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BAC
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BBT
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C
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JPM MLP ETN
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KRE
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USB
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WFC
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