Tags: Bove | Banks | banking | stocks

Dick Bove: Banks Haven't Looked Better in Decades

Thursday, 29 March 2012 07:46 AM

Banks are in the best financial shape today than they have been in over three decades, says noted banking analyst Dick Bove, of Rochdale Securities.
Bank stocks will continue to do well in the coming quarter.

"For the last few years we've been dealing with this situation where people buy financial stocks in October and sell them in May," Bove tells CNBC.

"These companies are doing extremely well" Bove says.

Everything is going right for such as loan growth, trading income, and pre-tax earnings, Bove.

Earnings have been up for the last 10 quarters and are poised for more gains, Bove says, adding that the banks are "in the best shape in three decades."

According to Bove, many bank stocks are trading at discount.

"Then if you look at book value and you compare it to the cash in the company, what you will see is the cash in the company in many cases exceeds book value. The stocks are not just selling at a discount to book value, they’re selling at a discount to cash."

Earlier in March, the S&P 500 stock index crossed over the 1,400 mark, the first time since the 2008 financial collapse.

Financial stocks helped push the index above the psychologically important mark.

"People are getting more comfortable with the S&P above 1,400 and financials leading, which by itself is indicative of a sigh of relief," says Rex Macey, chief investment officer at Wilmington Trust in Atlanta, Georgia, which manages about $60 billion, according to Reuters.

"The trend is your friend, and lately the trend has been higher."

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Thursday, 29 March 2012 07:46 AM
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