Richard Bove, financial strategist at Rochdale Securities, still recommends bank stocks. He sees continued improvement in the companies' operating businesses.
And Bove says Goldman Sachs’ recent $5 billion stock offering may not be the last from major banks. "If the equity market continues to rise, you'll see big increases in equity offerings," he told CNBC.
Bove places “buy” ratings on JPMorgan Chase, Wells Fargo, and Goldman Sachs.
While he is singing the banks’ praises, superstar bank analysts Mike Mayo and Meredith Whitney are humming a much different tune. They say their serious woes are by no means over.
CNBC asked Bove about the divergence.
“They’re focusing heavily on write-offs that will come, and they’re correct. I’m focusing on operating business,” he says. “And what I’m seeing in operating business is, No. 1, a huge increase in deposits.”
In addition, “the cost of the money coming into banks is less than one half of what it was a year ago. So not only are they getting these deposits, but they're getting them at extraordinarily low rates," he says.
“What I see is operating earnings as being relatively strong,” he says. “I don't think the loan losses are going to pull the operating earnings down as far as Mike and Whitney do."
Bove also says banks will benefit from the boom in mortgage refinancing and the end of write-downs for mortgage securities.
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