Oppenheimer bank analyst Meredith Whitney still sees an additional 30% downside in many big financial stocks–including, presumably, Merrill Lynch (MER), Morgan Stanley (MS), and Goldman Sachs (GS). Link to video here, recorded yesterday afternoon on CNBC.
Most of the big investment-banking stocks, Whitney says, are trading at 2X tangible book value [a measure of financial strength], which she thinks is too high. Lehman Brothers (LEH), meanwhile, is trading below tangible book, which suggests that the market doesn’t believe Lehman’s reported figures.
Whitney is startlingly bearish relative to the rest of her sell-side peers. We generally agree with her position, so she’s preaching to the choir, but it is still refreshing to hear such bracing (and unpopular) sentiments from the sell-side.
(Via The Big Picture)
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