"In this recession, consumers are spending less per purchase on their credit cards -- but that hasn't slowed down the credit card company MasterCard (NYSE: MA)," says Paul Tracy.

In his The StreetAuthority Market Advisor, he points out, "In the second quarter, MasterCard's net income grew by +26%, beating Wall Street's expectations by a significant margin." Here's his review.

"MasterCard makes its money from the fees it charges merchants and the banks that issue its cards. The issuing banks make money by charging consumers interest.

"And as we've seen, the banks can lose money when consumers default on their credit card debt. But MasterCard's fee-based business model has been relatively resilient during the downturn.

Continue reading Charged up over MasterCard

Charged up over MasterCard originally appeared on BloggingStocks on Thu, 03 Sep 2009 17:00:00 EST. Please see our terms for use of feeds.

"Citigroup (NYSE: C) used to be the world's #1 bank; it is now ranked #15 after the financial crisis," points out long-standing investing and trading expert Mark Skousen.

Yet, in his premium Hedge Fund Trader service, the leading advisor ranks the bank as a speculative buy. Here's his review.

"The stock fell to $1 a share from $40 a share two years ago. But now Citigroup is showing some breathing room after selling Smith Barney to Morgan Stanley for $6.7 billion and pushing revenues up to $34 billion.

Continue reading Insider buying at Citigroup (C)

Insider buying at Citigroup (C) originally appeared on BloggingStocks on Fri, 21 Aug 2009 11:00:00 EST. Please see our terms for use of feeds.

In her top-performing Global Investing advisory, Vivian Lewis looks at a lesser-known area of the income market -- non-cumulative preferreds -- explaining these vehicles and offering some favorites.

"Over 20 years ago, Barclays Bank, which is British, invented a new vehicle for raising money in the U.S. market to enhance its capital ratios and finance its growing dollar business.

"They were called non-cumulative preferred shares and were issued at $25/share to pay dividends four times a year just as normal U.S. stocks do. The clear target for these vehicles was U.S. retail investors.

Continue reading 'Royal' income: A look at non-cumulative preferreds

'Royal' income: A look at non-cumulative preferreds originally appeared on BloggingStocks on Fri, 19 Jun 2009 13:20:00 EST. Please see our terms for use of feeds.

Continue reading First Niagara knows that not all banks are alike

First Niagara knows that not all banks are alike originally appeared on BloggingStocks on Mon, 27 Apr 2009 11:30:00 EST. Please see our terms for use of feeds.

"Goldman Sachs (NYSE: GS) surprised investors with better-than-expected earnings while also raising equity to help replay $10 billion in TARP money," says Bill Martin In BullMarket.com.

"On the earnings front, Goldman swung back to solid profitability after turning in its first-ever quarterly loss at the end of its last fiscal year, which ended November 28th, 2008.

"Goldman earned a net profit of $1.66 billion, or $3.39 a share, compared to a Q1 2008 profit of $1.47 billion, or $3.23 a share. The results are a vast improvement over the loss of -$2.29 billion, or -$4.97 a share, reported for Q4 2008.

"Goldman Sachs has long been the best run of what were previously Wall Street's top investment banks and the strength of its trading operations were evident in the quarter.

Continue reading Good news from Goldman (GS)

Good news from Goldman (GS) originally appeared on BloggingStocks on Fri, 17 Apr 2009 11:30:00 EST. Please see our terms for use of feeds.

In his The Ticker Tape Digest, technician Leo Fasciocco looks for stocks that have broken out of basing patterns; his latest breakout stock is credit card processing firm Visa (NYSE: V).

"Visa manages a group of global payment card brands. It licenses them to financial institutions that issue cards to their customers. The company maintains the largest card service in the world with annual revenue of $6.5 billion.

"The stock soared after it came public. It peaked at 90 and then was swept lower with the bear market. The stock has put in what seems to be a good bottom. The key is for it to kick in an up trend. That is quite possible now, but not a given.

Continue reading Charged up over Visa

Charged up over Visa originally appeared on BloggingStocks on Mon, 13 Apr 2009 15:20:00 EST. Please see our terms for use of feeds.

Continue reading Hamilton's Bank of New York Mellon has endured

Hamilton's Bank of New York Mellon has endured originally appeared on BloggingStocks on Mon, 06 Apr 2009 11:30:00 EST. Please see our terms for use of feeds.

Continue reading Wells Fargo gains from other banks' losses

Wells Fargo gains from other banks' losses originally appeared on BloggingStocks on Mon, 06 Apr 2009 08:30:00 EST. Please see our terms for use of feeds.

Continue reading Doomsday Scenario: Hedge fund jobs evaporate, but are big banks really back?

Doomsday Scenario: Hedge fund jobs evaporate, but are big banks really back? originally appeared on BloggingStocks on Tue, 10 Mar 2009 17:40:00 EST. Please see our terms for use of feeds.

Growth stock expert Steve Rawls sees "dollars" from a company that helps sorts "coins." In his The Tipping Point Stocks newsletter, the advisor takes a look at Coinstar, Inc. (NASDAQ: CSTR).

"Often we miss the obvious. We miss how the little can equal the large. Consider your last visit to the supermarket. You probably passed by that machine that offered to count your pennies for a small fee. It's neat for people who saved their pennies, but not for you, right?

"What if I told you that the coin machine you just passed by with little thought was part of a $1.2 to $1.3 billion enterprise? Welcome to the world of Coinstar.

Continue reading Coinstar (CSTR): Poor economy turns coins into dollars

Coinstar (CSTR): Poor economy turns coins into dollars originally appeared on BloggingStocks on Thu, 05 Mar 2009 13:20:00 EST. Please see our terms for use of feeds.

Bank of America (NYSE: BAC) posted 2008 net income of $4 billion, down from $15 billion in 2007. Its fourth quarter revenue was up 19% to $15.98 billion from $13.45 billion in 2007. But last fall Bank of America agreed to acquire Merrill Lynch -- which had a fourth-quarter net loss of $15.31 billion. And as an apparent condition of closing the Merrill deal, Bank of America has demanded and received about $120 billion from the government ($20 billion + the part of the $118 billion absorbed by the government).

The terms of Bank of America's deal mean the government will inject an additional $20 billion into Bank of America -- raising its holdings to $45 billion and making its 6% stake the single largest one. The government will also guarantee part of a pool of $118 billion in illiquid assets, including residential and commercial real estate and corporate loans. Bank of America will be responsible for the first $10 billion in losses; the Treasury and the FDIC will take on the next $10 billion in losses. The Fed will absorb 90% of any additional losses, with Bank of America responsible for the rest.

Continue reading Bank of America posts $4 billion profit, gets $120 billion from taxpayers

Bank of America posts $4 billion profit, gets $120 billion from taxpayers originally appeared on BloggingStocks on Fri, 16 Jan 2009 09:24:00 EST. Please see our terms for use of feeds.

"Annaly Capital (NYSE: NLY) is in the sweet spot," says Steve Sjuggerud in Daily Wealth. He says, "It borrows money at a low interest rate and invests it at a higher rate -- and earns the 'spread'."

"The cost of money is historically low, and it's headed lower. Meanwhile, relative to the cost of money, the return on money is higher than it's ever been.

"The ultimate way trade on this historic discrepancy, for high-returns with very low risk, is through shares of companies like Annaly, which is now s now paying a 16% dividend.

"In the latest-reported quarter, the company borrowed money at 3.5%. (The credit markets have calmed down a bit, so its cost of borrowing should be even lower next quarter.)

"It invests the money in government-guaranteed bonds. You remember how the Treasury bailed out Fannie Mae and Freddie Mac? It wiped out shareholders. But it explicitly guaranteed the bonds.

"In the latest-reported quarter, Annaly earned 5.6% interest on these risk-free bonds. Therefore, it earned a 2.1% spread. If the company uses seven times leverage, a 2.1% spread means a 14.7% return on its money.

"Analysts estimate the company will earn $2.50 per share next year. It pays out essentially all of its earnings in dividends. So that'll be a dividend yield of about 19%. This is ridiculous. An opportunity like this only appears during market turmoil like we're experiencing now.

"This is a historic moment. The difference between the cost of money and the return on money relative to that cost is at the most extreme levels I've seen in my career. Take advantage, and buy stocks like Annaly today."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

Annaly Capital (NLY): 'In the sweet spot for historic yields' originally appeared on BloggingStocks on Fri, 21 Nov 2008 15:39:00 EST. Please see our terms for use of feeds.

"Recent valuations in financial stocks suggest either 'the world is coming to an end' or there are some great values," says Gregory Dorsey.

Here, the contributing editor to the top-notch Leeb's Income Performance Letter takes a look at one such "bargain" in the sector: U.S. Bancorp (NYSE: USB).

"So far, the financial sector has written off more than $300 million in assets. By some accounts the damage will rise to $1 trillion or more before all is said and done.

"The selloff, which at its nadir was marked by a 55% year-over-year decline in the KBW Index, pushed the constituent members down to a collective 0.64 times book value and a dividend yield of 9%.

"At those levels, either the world is coming to an end or there are tremendous bargains for investors with the courage of their convictions. Looking hard at the data, we can only conclude the latter is the case, provided you're careful with your investment choices.

Continue reading Insiders bank on US Bancorp (USB)

Insiders bank on US Bancorp (USB) originally appeared on BloggingStocks on Tue, 26 Aug 2008 11:57:00 EST. Please see our terms for use of feeds.

Wachovia (NYSE: WB) is out with numbers that were much worse than the Street had estimated. According to MarketWatch Wachovia "lost $8.86 billion, or $4.20 a share, in the second quarter, compared to a profit of $2.34 billion, or $1.20 a share, a year ago. On an adjusted basis, it lost $1.27 a share; analysts polled by FactSet Research had expected a loss of 71 cents a share."

Yikes. A loss of $8.9 billion -- how is that even possible? The company also slashed its dividend to just 5 cents a share and is closing down its wholesale mortgage operations.

I guess the real question is barring a takeover, how long will it be till the whole bank gets shut down? Just think the loss is equal to a third of its entire market cap.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/22/08.

Does Wachovia's loss signal the end? originally appeared on BloggingStocks on Tue, 22 Jul 2008 08:54:00 EST. Please see our terms for use of feeds.

"While U.S. banks have struggled amid the credit and housing crises, Credicorp (NYSE: BAP) has excelled," notes John Reese, who assesses stocks based on the strategies of various well-known and time-tested gurus.

Here, the editor of the Validea newsletter looks at the Peru-based banking firm commerical banker and explains how it "passes the test" for four leading guru strategies: Peter Lynch, Martin Zweig, the Motley Fools, and William O'Neill.

"Credicorp's main subsidiary, Banco de Credito del Peru, actually grew its mortgage business 8.2% in the third quarter of 2007 (the most recent quarter for which data is available) as Peruvians' purchasing power continued to increase.

"My Peter Lynch-based strategy considers Credicorp a 'fast-grower' because of its 42.44% growth rate (based on the average of the three-, four-, and five-year earnings per share figures).

"Lynch famously used the P/E/Growth ratio to identify growth stocks selling on the cheap. By dividing Credicorp's 19.6 P/E ratio by that growth rate, we get a P/E/G of 0.46, which falls into my Lynch-based model's best-case category (below 0.5).

Continue reading Creditcorp (BAP): Leading gurus bank on Peru

Creditcorp (BAP): Leading gurus bank on Peru originally appeared on BloggingStocks on Fri, 25 Apr 2008 10:35:00 EST. Please see our terms for use of feeds.

"Almost untouched by the subprime scandal and the subsequent credit fallout, Canada's banks are strong and their risk of writeoffs are consider by most analysts as minor," notes Genia Turanova and Gregory Dorsey in Leeb's Income Performance Letter.

Here, they look at two favorites in the Canadian banking sector: Toronto-Dominion Bank (NYSE: TD) and Royal Bank of Canada (NYSE: RY).

"Toronto-Dominion and its subsidiaries, collectively known as TD Bank Financial Group, serve more than 14 million customers. The group offers a full range of financial products and services including wholesale banking securities, personal and business banking, wealth management and U.S. personal and commercial banking.

"TD Bank is looking to expand its US presence by acquiring New Jersey-based Commerce Bancorp. After the acquisition is completed, TD's US banking operations will double. As for the hot topic of all financials these days - its subprime exposure - Commerce Bancorp's $16 billion loan portfolio has no subprime exposure.

Continue reading Income expert banks on Canada

Income expert banks on Canada originally appeared on BloggingStocks on Mon, 07 Apr 2008 14:23:00 EST. Please see our terms for use of feeds.

According to the article: "I would not be averse to a Fed-assisted transaction," Stumpf said, adding that any deal would have to meet the company's traditional acquisition targets and benefit the bank's acquired customers. Wells has built a reputation as a disciplined buyer over the years, focusing on deals that generate at least a 15% internal rate of return and contribute to the bottom line within three years.

"Fixer-uppers don't bother us," he added.

Who wouldn't want to be part of a deal like this? It's become pretty obvious that JP Morgan Chase got an amazing deal to buy Bear Stearns, and now Wells Fargo wants to join the party.

Continue reading Wells Fargo looking to pull off a JP Morgan-like deal

Wells Fargo looking to pull off a JP Morgan-like deal originally appeared on BloggingStocks on Tue, 25 Mar 2008 15:55:00 EST. Please see our terms for use of feeds.

The head of German banking giant Commerzbank (OTC: CRZBY) says that there are more rough seas ahead for the banking industry, particularly in the US. "Bankers did not adequately understand these (mortgage) investments and relied too heavily on high-grade credit ratings from agencies that helped put together the products, then rated them," Klaus-Peter Müller told The New York Times. "This ignorance of the risks extended to the top echelons of the banks."

Not a very pleasant way to talk about your peers, but probably accurate nonetheless.

Commerzbank has already admitted to $1.8 billion in subprime exposure, but Müller fears that US banks are being selective in their disclosures in the hopes that some of the problems will go away. He is also concerned that US banks used the opinions of ratings agencies to make investment decisions instead of doing their own risk management.

In general, Müller is probably right. If his hint about US banks being slow in disclosing problems is true, he may feel that there is another shoe to drop in the form of more big write-offs before the end of the year.

That would put much more pressure on banking stocks.

Douglas A. McIntyre is an editor at 247wallst.com.

Head of Commerzbank says financial woes not over originally appeared on BloggingStocks on Tue, 27 Nov 2007 09:44:00 EST. Please see our terms for use of feeds.

Continue reading The major bank stocks: Is it time to buy?

The major bank stocks: Is it time to buy? originally appeared on BloggingStocks on Thu, 09 Aug 2007 10:30:00 EST. Please see our terms for use of feeds.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Citigroup Inc. (NYSE: C) is the top conservative investment for 2007 from Kelley Wright. The editor of Investment Quality Trends notes, "I know this company has been public relations-challenged, but let's consider the fundamentals.

"First, it's not only undervalued, it's trading almost 71% below its historic undervalued dividend yield of 2.20%. In dollar terms, the stock can appreciate $37 to $89 and still represent excellent historic value!

"Second, the stock has earned an A+ ranking by S&P for earnings and dividend quality; S&P doesn't hand out an A+ easily. The stock has also earned our 'G' designation, which denotes a remarkable 10% annual dividend growth over the past 12 years. And, the stock has a P/E of 11 and is trading right at 2 times book value; numbers Benjamin Graham would like.

"CEO Charles Prince is feeling the heat on unlocking shareholder value. Based on recent management restructuring, it appears they will attempt to boost earnings by cutting costs and trying to squeeze value from every corner of this far-flung enterprise. At the end of the day though, I think Prince will have to do more and the Street will reward those efforts."

To see Kelley's favorite speculative idea for 2007, click here.

Top Picks 2007: Kelley Wright banks on Citi for safety originally appeared on BloggingStocks on Mon, 01 Jan 2007 14:30:00 EST. Please see our terms for use of feeds.