Tags: Bove | Buy | Bank | Stocks

Bove: I Changed My Mind: Buy Bank Stocks Now

Wednesday, 24 Aug 2011 12:28 PM

Banking analyst Dick Bove says he's changed his mind on bank stocks and say they're a good buy now.

The famed Rochdale Securities analyst tells CNBC one month after urging investors to sell bank stocks that those who heeded his warning and sold took their proceeds and stashed them back in the banks whose stocks they were selling.

In just two weeks, $200 billion in new deposits have flowed into banks.

"In the last few days I started looking at valuations of these companies and was just shocked by what I saw," Bove says.

Dick-Bove-3-thumb-200.jpg
Dick Bove
(Rochdale Securities photo)
"These stocks are selling in many cases at lower valuations than the first quarter of 2009, which was supposedly the bottom."

Bank of America, for example, is sitting on $140 billion in cash, more than its total tangible book value, and well above its $65 billion market cap. The company’s stock has plunged 30 percent in the past month.

Translation: it's oversold.

"What the market is saying is that this thing isn’t even worth its liquidation value when its liquidation value is in cash," Bove tells CNBC.

Despite taking a beating in the stock markets, banks are recovering from the Great Recession, officials say.

The number of banks on the government’s list of institutions most at risk for failure fell in the second quarter, dropping by 23 to 865 — the first drop since before the financial crisis began, the New York Times reports.

"Banks have continued to make gradual but steady progress from the financial turmoil and severe recession that unfolded from 2007 and 2009," says Martin J. Gruenberg, the acting FDIC chairman, according to the Times.

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Banking analyst Dick Bove says he's changed his mind on bank stocks and say they're a good buy now. The famed Rochdale Securities analyst tells CNBC one month after urging investors to sell bank stocks that those who heeded his warning and sold took their proceeds and...
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2011-28-24
Wednesday, 24 Aug 2011 12:28 PM
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