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 1000Â®
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)