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Zacks Value Investor Highlights: JP Morgan Chase, PNC Financial, Bank of America, Comerica and Western Alliance Bancorporation
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For Immediate Release
Chicago, IL – November 30, 2018 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/340175/buffett-goes-all-in-on-the-banks-should-you)
Buffett Goes All In on the Banks: Should You?
Welcome to Episode #119 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
The hedge fund and investment managers, including Warren Buffett’s Berkshire Hathaway, recently filed their 13F filings for the third quarter 2018.
This is where we find out what stocks they’re buying or selling in the quarter.
Berkshire Hathaway had a few surprises in the quarter.
One of them was the big bet on the banks.
Big Stakes in the Banks in the Third Quarter
1. JP Morgan Chase (JPM - Free Report) was added to the Berkshire portfolio for the first time with a $4 billion purchase. JPM is cheap. It trades with a forward P/E of just 11.7 yet is also expected to see double digit earnings growth this year.
2. PNC Financial (PNC - Free Report) was also a new addition. Buffett bought $829 million, for a 1.3% share. PNC is also cheap with a forward P/E of 12.6. It pays a dividend yielding 2.8%.
3. Bank of America (BAC - Free Report) has been in the portfolio for numerous years but in the third quarter, Berkshire added $5.8 billion to its stake. It’s Bank of America position is now worth over $25 billion. It trades with a forward P/E of only 10.8.
Should You Follow Buffett’s Lead?
Value investors are asking themselves if they shouldn’t get into the banks as well. They are cheap and have solid fundamentals, especially as the Fed continues to raise rates.
But because of Berkshire’s sheer size, it’s limited as to what it can buy. It shouldn’t be a surprise that Berkshire now owns 3 out of the 4 largest US banks. Citigroup is the only one it doesn’t own.
It basically doesn’t have much other choice. It’s too big to buy stock positions in the smaller banks and still use its cash.
It’s $4 billion purchase of JPMorgan stock could have bought 4 to 10 smaller banks outright but then Berkshire would have to deal with all the regulatory issues involved in running banks.
If investors want to emulate Buffett’s moves, they shouldn’t forget to take a look at smaller banks. Smaller banks are where the growth is.
Buffett can’t buy small and mid-cap stocks, but you still can.
2 Banks Buffett Wishes He Could Buy
1. Comerica (CMA - Free Report) is headquartered in Texas but also has a presence in other states, including Michigan. It has a market cap of $13 billion. Earnings are expected to rise 51.3% in 2018 and another 12% in 2019. That’s over 63% earnings growth in just 2 years.
2. Western Alliance Bancorporation (WAL - Free Report) is a $5 billion regional bank in Arizona and other western states. Earnings are expected to rise 31.9% in 2018 and another 11.9% in 2019. The insiders have been buying up shares as the stock has weakened. Shares are down 16% year-to-date.
Investors shouldn’t totally rule out the community banks either as these small banks will likely see the biggest growth.
But how do you find good quality community bank stocks?
Find out the answer to this, and all your pressing questions about investing like Buffett, on this week’s podcast.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Value Investor Highlights: JP Morgan Chase, PNC Financial, Bank of America, Comerica and Western Alliance Bancorporation
For Immediate Release
Chicago, IL – November 30, 2018 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/340175/buffett-goes-all-in-on-the-banks-should-you)
Buffett Goes All In on the Banks: Should You?
Welcome to Episode #119 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio service, shares some of her top value investing tips and stock picks.
The hedge fund and investment managers, including Warren Buffett’s Berkshire Hathaway, recently filed their 13F filings for the third quarter 2018.
This is where we find out what stocks they’re buying or selling in the quarter.
Berkshire Hathaway had a few surprises in the quarter.
One of them was the big bet on the banks.
Big Stakes in the Banks in the Third Quarter
1. JP Morgan Chase (JPM - Free Report) was added to the Berkshire portfolio for the first time with a $4 billion purchase. JPM is cheap. It trades with a forward P/E of just 11.7 yet is also expected to see double digit earnings growth this year.
2. PNC Financial (PNC - Free Report) was also a new addition. Buffett bought $829 million, for a 1.3% share. PNC is also cheap with a forward P/E of 12.6. It pays a dividend yielding 2.8%.
3. Bank of America (BAC - Free Report) has been in the portfolio for numerous years but in the third quarter, Berkshire added $5.8 billion to its stake. It’s Bank of America position is now worth over $25 billion. It trades with a forward P/E of only 10.8.
Should You Follow Buffett’s Lead?
Value investors are asking themselves if they shouldn’t get into the banks as well. They are cheap and have solid fundamentals, especially as the Fed continues to raise rates.
But because of Berkshire’s sheer size, it’s limited as to what it can buy. It shouldn’t be a surprise that Berkshire now owns 3 out of the 4 largest US banks. Citigroup is the only one it doesn’t own.
It basically doesn’t have much other choice. It’s too big to buy stock positions in the smaller banks and still use its cash.
It’s $4 billion purchase of JPMorgan stock could have bought 4 to 10 smaller banks outright but then Berkshire would have to deal with all the regulatory issues involved in running banks.
If investors want to emulate Buffett’s moves, they shouldn’t forget to take a look at smaller banks. Smaller banks are where the growth is.
Buffett can’t buy small and mid-cap stocks, but you still can.
2 Banks Buffett Wishes He Could Buy
1. Comerica (CMA - Free Report) is headquartered in Texas but also has a presence in other states, including Michigan. It has a market cap of $13 billion. Earnings are expected to rise 51.3% in 2018 and another 12% in 2019. That’s over 63% earnings growth in just 2 years.
2. Western Alliance Bancorporation (WAL - Free Report) is a $5 billion regional bank in Arizona and other western states. Earnings are expected to rise 31.9% in 2018 and another 11.9% in 2019. The insiders have been buying up shares as the stock has weakened. Shares are down 16% year-to-date.
Investors shouldn’t totally rule out the community banks either as these small banks will likely see the biggest growth.
But how do you find good quality community bank stocks?
Find out the answer to this, and all your pressing questions about investing like Buffett, on this week’s podcast.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.