Bove Believes in Goldman, Citigroup, BNY Mellon

Thursday, 22 Apr 2010 01:26 PM

By Dan Weil

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Star bank analyst Dick Bove cites Goldman Sachs, Citigroup and Bank of New York Mellon as his top stock picks.

And if you’re looking for bank stocks to sell, the Rochdale Securities strategist recommends Wells Fargo, Morgan Stanley and Northern Trust.

So what is Bove’s reasoning?

“I still believe Goldman Sachs is one of the best, if not the best company, that I’ve ever analyzed,” he told CNBC.

“Citigroup will be surprisingly strong in the quarter, simply because it internals are getting better. For a really cheap bank stock, Bank of New York (BNY Mellon) is extraordinarily good.

Goldman Sachs said its first-quarter earnings almost doubled to $3.3 billion as its trading business again surpassed the rest of the financial industry.

Citigroup said it earned $4.4 billion after payment of preferred dividends, compared with a loss of $696 million a year earlier. That was the bank's biggest quarterly profit since the second quarter of 2007.

Bank of New York Mellon reported a profit of $601 million, or 49 cents a share, in the quarter, compared with earnings of $363 million, or 31 cents a share a year earlier.

As for his recommended short positions, Bove said, "If I bought Citi, I would sell Wells Fargo. If I bought Goldman, I might ease up on Morgan Stanley. And if I bought Bank of New York, I'd back away from Northern Trust.”

Some experts are still concerned about the health of the country’s bank industry.

MIT economist Simon Johnson says the biggest banks should be broken up.

"The process of saving them has allowed them to build themselves up so that their balance sheets are now bigger than they were before the crisis. The too big to fail problem has become worse," he told Reuters.

© 2014 Moneynews. All rights reserved.

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