Financials have been left behind in the current rally and therefore offer a great opportunity for those of you who are still looking to get back into the markets, a team from JP Morgan argues in Barron’s Investor Soap Box today.
“Takeaways from the second quarter: net interest margin (NIM) is expanding; rate of deposit growth is solid; the rate of 60- to 90-day delinquencies is slowing; reserve builds are slowing; peak credit losses may be reached sooner than expected; and commercial real-estate remains weak — so not all is positive,” they write.
They expect that analysts will start improving the ratings on banks as they continue to beat earnings estimates. And take the massive short interest that remains in financials as a contrary indicator.
So who do they like?
- Citigroup (C);
- City National (CYN);
- Privatebancorp (PVTB);
- Cullen/Frost Bankers (CFR);
- Hartford Financial Services Group (HIG);
- FirstMerit (FMER);
- Comerica (CMA);
- Investment Technology Group (ITG);
- and Wells Fargo (WFC).
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