Posted back in April the pull back was a chance to buy some US Financials, and to buy GS which looks the cheapest (prior to that it was C). They were all trading below fair value – now they are above fair value as prospects of higher rates and tax reform. Sometimes strategies do take time to play out.Take some profit, but keep a core position as these stocks may break out to new high if results are good.
Px Vs Fair Values
April: $JPM 84.5 vs 83 Yield 2.3% [Dimon top CEO!]
Now: $JPM 95 vs 90 Yield 2.3% – going to a 100.
April: $C 58 vs 64 Yield 1% – cheapest to Book value – but seems to be the least liked!
$C 69 vs 72 Yield 1% – best performer over 2 years
April: $MS 42 vs 44 Yield 1.9% – reported a great quarter, Gorman is doing a great job…
$MS 49 vs 45 Yield 1.9% –
April: $GS 217 vs 250 Yield 1.4% [ 1.1 x book value] tough quarter, but they will bounce back!
$GS 237 vs 247 Yield 1.4% – they need to report a good quarter.
April: $BAC 22.5 vs 25 Yield 1.4%
$BAC 25 vs 24.5 Yield 1.4%
2CentView has a trading position in GS average cost 225, looking to take some profit at above 245 next week. Also, have a core position, which was trimmed back at 49 ahead of results. Keeping core positions in both – think US rates are going higher.