Top Bank Stocks 2012 - Citigroup Inc. (C) - Citigroup (C) is my top Bank Stock for 2012.  After doing a reverse stock split in May 2011, Citigroup stock dropped from $42 all the way down to $25.50.  Why did C stock drop so much?  Debt fears all around the world.  When you have such a severe banking crisis in Europe, it tends to spread into global banks all around the world.  Investing in Bank Stocks during the summer is usually a bad idea.  Bank stocks tend to rally during the second half of the year like we saw in 2009 and 2010.  Citigroup is a cheap stock on paper, trading under book value at $27 per share.  At some point in 2012, I feel Citigroup can rally back to $37-$40.  This would be a $10 move in the stock or a 35-40% gain.  Citigroup may go under $20 if the stock market takes another leg lower.  Keep an eye on the S&P 500 which has support at 1100-1120. 

Is Citigroup (C) stock a buy in 2012?  I believe so!

Best Bank Stocks 2012 - Bank of America (BAC) - Bank of America (BAC) stock is also a buy in 2012.  BAC recently bounced off $6.00 and is now back to $7.00.  Given how much capital Bank of America has, I'd have to believe that we've seen a bottom.  If we do see another leg lower, I'd love to buy BAC stock in the $5's.  Bank of America is another one of my bank stock picks for 2012.  I have a personal price target on BAC for 2012 of $11.  This may seem crazy but BAC was just $11 two months ago.

Bank ETF's 2012 - Direxion Daily Financial Bull 3X Shares (FAS) - Direxion Daily Financial Bull 3X Shares (FAS) is a bank ETF that offers 3x leverage towards a basket of banks.  If you think the banks are a great buy, FAS is an ETF worth watching.  The investment seeks daily investment results, before fees and expenses, of 300% of the price performance of the Russell 1000® Financial Services Index. The fund will invest at least 80% of assets in securities that comprise the index. It will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The fund is non-diversified.  FAS holds stock such as BAC, GS, C, UBS, and JPM.

If you think the bank sector is due for a decline, buy FAZ - Direxion Daily Financial Bear 3X Shares (FAZ)