US financial crisis is over, says Punk Ziegel's Bove March 20 (Reuters) - The U.S. financial crisis is over but problems facing the economy are not, said Richard Bove, financial analyst with broker Punk Ziegel, adding that this was a "once in a generation" opportunity to buy bank stocks. http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSBNG14754520080320
You know.. Dick Bove was amongst the first of analysts to smell a rat in the financials some 9 months ago. This is a bold and very meaningful call - although, not quite a change in stance. He's liked banks for the last 2 months or so, if I remember properly. What I'm curious is some elaboration on the 'soporific accounting rule' .... ?
Actually he has been bullish for much longer than the last two months although you wouldn't know that by listening to CNBC who proclaimed he had just become bullish. Bove went from saying the credit crisis would last five years to upgrading C to a buy two months later. How could he have such a drastic change in opinion? He couldn't which is why I question his motives. Below are some of Bove's past calls: 11/6/07 In response to comments from Meredith Whitney on the dire situation C was facing Dick Bove said "Buy C today." 11/12/07 Punk Ziegel analyst Richard X. Bove upgraded Goldman Sachs Group Inc. on Monday, saying the investment bank has superior software and systems shielding the company from risk. 11/15/07 Punk Ziegel upgraded LEH and raised their target to $70 from $59 after meeting with management to reflect the company's solid management and competitive benefits. 11/28/07 Bove said "Even if C has an additional $30 billion ($12 billion of that had already been announced) of writedowns coming, C looks attractive at this point. 12/14/07 In reference to C Bove said "The dividend is not going to be cut. It is not even remotely possible that the dividend will be cut." 1/2/08 Despite worries over Citigroup Inc.'s (C) dividend and capital position, the stock is a buy because no other financial firm has the company's global reach, Punk, Ziegel & Co. analyst Richard Bove wrote in a research note. 2/4/08 Punk Ziegel analyst Dick Bove upgraded shares of Lehman Bros. (LEH) to buy, citing meaningful interest-rate cuts, a surge in mortgage refinancings and rising equity markets. Bove also raised his rating on Goldman Sachs (GS), Bear Stearns (BSC), and Merrill Lynch (MER) to market perform. 3/7/08 Bove said on the Fast Money show "Right now C is the best buying opportunity in a lifetime." Ironically there was no mention that he had been recommending it since early November.
No one with any common sense would ever take investment advice from a broker. That said, i also like banks, but only very specific ones, and i arrived at the decision to buy them using my own research, not the advice of any broker.
Since when did PZ become a powerhouse commanding respect? I remember when they were born in the mid 1980s IPO go go years and was surprised to learn they are still alive.
Bank of America Corp., the second biggest U.S. bank by assets, may take a record $6.5 billion provision in the first quarter to cover possible future losses in its home equity and mortgage portfolios, Punk Ziegel and Co. analyst Richard Bove wrote. Whether the two portfolios have that level of loss will depend on the economy and developments in the housing markets, Bove wrote in his e-mailed March 24 report. The bank, meanwhile, will experience only a shift in equity and still report a profit, he wrote. The Charlotte, North Carolina-based bank plans to release first-quarter results April 21. ``At the moment, I do not foresee the economy plunging to a level that will substantiate this reserve build,'' wrote Bove, who has a ``buy'' on the shares and doesn't own any of the stock. `This is due to a belief that the change in the value of the dollar will stimulate growth and that the actions by the Federal Reserve will take effect.'' The world's biggest banks and securities firms have disclosed at least $195 billion in writedowns and credit losses since the start of 2007, as mortgage and debt markets seized up. Bove advised selling financial shares eight months ago, before they tumbled. ____________________________ I think his forecasts about the overall economy are more important then on single stock names...