Top Bank Stocks For 2018

Charles Schwab (NYSE:SCHW) continues to execute on their differentiated strategy of providing low-cost financial services to mass affluent customers and advisors in the U.S. The Company continued to generate excellent and expanding pre-tax profit margins, relative to its large captive and independent competitors, despite aggressively lowering trading commissions earlier in the year, and launching low -cost index mutual funds in the most recent quarter. As Schwab attracts more assets to its banking and brokerage platforms, the Company’s overhead expense as a percentage of platform assets continues declining to what we calculate to be roughly 15 basis points per dollar of assets (trailing four quarters through the end of September). This overhead expense compares to the nearly 150 basis points of net interest margin available to the Company on almost $70 billion of client assets that they plan on transferring from money markets to the banking subsidiary over the next three years. Combined with a dramatically lower tax rate for the foreseeable future, we think Schwab has a unique opportunity to substantially grow its earnings base over the next several years.

From David Rolfe (Trades, Portfolio)’s fourth quarter 2017 shareholder commentary.

Top Bank Stocks For 2018: First Commonwealth Financial Corporation(FCF)

Advisors’ Opinion:


    The last year Netflix generated positive free cash flow (FCF), was 2010, which happens to coincide with the year it began significantly increasing its content library, per Figure 2 above. Since then, Netflix has burned through cumulative $3.6 billion in cash, per Figure 3, and the cash burn is only accelerating. In 2015, NFLX’s FCF sat at -$1.6 billion, and over the last twelve months, FCF has worsened to -$1.9 billion.

Top Bank Stocks For 2018: Ampco-Pittsburgh Corporation(AP)

Advisors’ Opinion:

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    New York (AP) — Tom Petty died last year because of an accidental drug overdose that his family said occurred on the same day he found out his hip was broken after performing dozens of shows with a less serious injury.

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    Tehran, Iran (AP) — An Iranian commercial plane crashed on Sunday in a foggy, mountainous region of southern Iran, killing all 66 people on board, state media reported.

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    Jerusalem (AP) — Israeli authorities have begun distributing deportation notices to thousands of African migrants.

    In letters delivered Sunday, Israel says the migrants have 60 days to accept the offer to leave the country for an unnamed African destination in exchange for $3,500 and a plane ticket. Those who don't by Apr. 1 will be incarcerated indefinitely.

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    El-Arish, Egypt (AP) — Egyptian security officials say a roadside bomb has targeted a pickup truck carrying members of the security forces in the turbulent north of the Sinai Peninsula, killing two.

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    Paris (AP) — Floodwaters were nearing their peak in Paris on Saturday, with the rain-swollen Seine River engulfing scenic quays and threatening wine cellars and museum basements.

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    New York (AP) — The bitter cold that followed a massive East Coast snowstorm should begin to lessen as temperatures inch up and climb past freezing next week, weather forecasters said.

Top Bank Stocks For 2018: Canadian Imperial Bank of Commerce(CM)

Advisors’ Opinion:

  • [By Logan Wallace]

    Canadian Imperial Bank of Commerce (TSE:CM) (NYSE:CM) – Analysts at Desjardins reduced their Q2 2018 earnings per share estimates for Canadian Imperial Bank of Commerce in a research report issued to clients and investors on Wednesday, May 2nd. Desjardins analyst D. Young now forecasts that the company will post earnings of $2.85 per share for the quarter, down from their prior estimate of $2.86.

Top Bank Stocks For 2018: Wells Fargo & Company(WFC)

Advisors’ Opinion:

  • [By Ben Levisohn]

    Guggenheim’s Eric Wasserstrom and Jeff Cantwell offer four reasons they cut Wells Fargo (WFC) to Sell from Neutral:

    Photo: Justin Sullivan/Getty Images

    We are downgradingWells Fargo to SELL with a $47 target. Our downgrade reflects: 1) The current share price is now in excess of all of our valuation scenarios, including our 2017, 2018 and Bull Case EPS forecasts. 2) Our 2017E-18E EPS remain 5% below consensus, reflecting our outlook for higher legal and compliance costs as a result of the remediation of the company’s disclosed fraudulent retail account activity. 3) While the shares’ valuation remain modestly below its historical level relative to the peer group, we believe our outlook for earnings compression should truncate further revaluation. 4) We also believe that some of the stock’s recent multiple expansion reflects the view thatWells Fargo may face less legal risk from the Dept. of Justice in the incoming presidential administration; in contrast, we believe the DoJ will actively pursue post-financial crisis malfeasance like that disclosed at Wells Fargo.

    Shares of Wells Fargo have dropped 2.2% to $52.08 at 2:17 p.m. today, while the SPDR S&P Bank ETF (KBE) has risen 0.1% to $40.05, and the Financial Select Sector SPDR ETF (XLF) has fallen 0.7% to $22.06.

    Guggenheim also downgraded Bank of America (BAC) today.

  • [By Chris Dier-Scalise]

    Among the brands being sold were Alcoa Corporation (NYSE: AA) and Ford Motor Company(NYSE: F), which both paid out dividends in December. The financial and oil sectors also experienced a sell-off to finish 2016. Wells Fargo & Co (NYSE: WFC) and Citigroup Inc (NYSE: C) were net sold as each reached new year-to-date highs and investors unloaded ConocoPhillips (NYSE: COP) and Chevron Corporation (NYSE: CVX) as their prices normalized with the rise in the price of oil.

  • [By Dustin Blitchok]

    In August, Wells Fargo & Co. (NYSE: WFC) revised the number of people affected when the bank opened unauthorized bank and credit card accounts upward to 3.5 million.

  • [By Virendra Singh Chauhan]

    Banking, as a whole, is another sector which will benefit from a higher interest rate scenario. It is here that Berkshire will benefit from its large investments in publicly listed financial institutions. As of Sept 30, 2016, Berkshire’s investments in public financial institutions, at $42 Billion, accounted for 33% of the total holdings in public listed companies. The stocks of most large financial institutions have rallied since the election results were declared. Wells Fargo (NYSE:WFC), one of Berkshire’s largest holding is up nearly 26% since the election results were declared while American Express (NYSE:AXP), the second largest financial holding in the Berkshire portfolio is up nearly 12% in the similar time frame.

  • [By Motley Fool Staff]

    Wells Fargo(NYSE:WFC) is one of Berkshire Hathaway’s(NYSE:BRK-A)(NYSE:BRK-B) largest stock investments, and according to Warren Buffett’s comments at Berkshire’s recent annual meeting, there’s no reason to believe that will change soon.

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