Just call it an extended buying opportunity for one of the most trusted banks in the United States. I'm Reiterating my Buy rating for Bank of New York Mellon (NYSE: BK), first recommended on April 6, 2009 at a price of $28.16. Founded by Alexander Hamilton, perhaps my favorite U.S. Constitution Framer, The Bank of New York provides services that enable institutions and individuals to move and manage their financial assets in more than 100 markets globally. The core of BK's business, custodial services, is doing just fine, with $16 trillion in assets under custody. The First Call FY2009/FY010 EPS estimates for BK are $2.06 to $2.51.
I still expect new business wins to register an impressive performance, as more clients seek established, trusted custodians in light of credit market turmoil and investment management scandals. However, average earnings asset growth and net interest margins may not achieve earlier projections, and that's weighed on the stock near-term. Even so, investors should view that as an extended Buy opportunity, and look for BK to shine in the quarters ahead.
Stock Analysis: The Bank of New York Mellon is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in BK now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your BK position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $17.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
11-11-2009 @ 2:48PM
Michael Brangaitis said...
I have a Hamilton Bank Note for the purchase of 50 shares of stock from the Vicana Sugar Company in Cuba. The year 1951 and the Registar was City Bank Farmers Trust Company. Found it in a box of pictures my father left me.If you know nothing about this old paper can you point me in the right direction.....or should I just keep it with the pictures and look at it every once in a while. Thanks so much.