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Sharon Kubicek
Alisa Carli
Christine Duggan

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M5X 1H3
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Commentary


April 2018
 

EQUITY STRATEGY
 

Still Loving Financials: Revisiting our Bullish Case for the Financial Sector

 

 

 


Back on February 21, 2012 we made a very bullish call on U.S. Mega Banks (“The Half of Book (Value) Club”), a most hated sector at the time. Since then, we have reiterated this stance several times and we continue to recommend many of the same stocks (Bank of America, Morgan Stanley, Citigroup and JPMorgan in particular) despite their very strong performance over the last six years. In this report, however, we broaden out the call to include other sub-sectors (such as life insurance) and geographies. European financials seem like great value investments right now given the continuing economic recovery for major European countries. The Euro-area unemployment rate is on a continued downtrend and positive structural reforms are making their economies more competitive (i.e labor and land reforms).Back on February 21, 2012 we made a very bullish call on U.S. Mega Banks (“The Half of Book (Value) Club”), a most hated sector at the time. Since then, we have reiterated this stance several times and we continue to recommend many of the same stocks (Bank of America, Morgan Stanley, Citigroup and JPMorgan in particular) despite their very strong performance over the last six years. In this report, however, we broaden out the call to include other sub-sectors (such as life insurance) and geographies. European financials seem like great value investments right now given the continuing economic recovery for major European countries. The Euro-area unemployment rate is on a continued downtrend and positive structural reforms are making their economies more competitive (i.e labor and land reforms). Back on February 21, 2012 we made a very bullish call on U.S. Mega Banks (“The Half of Book (Value) Club”), a most hated sector at the time. Since then, we have reiterated this stance several times and we continue to recommend many of the same stocks (Bank of America, Morgan Stanley, Citigroup and JPMorgan in particular) despite their very strong performance over the last six years. In this report, however, we broaden out the call to include other sub-sectors (such as life insurance) and geographies. European financials seem like great value investments right now given the continuing economic recovery for major European countries. The Euro-area unemployment rate is on a continued downtrend and positive structural reforms are making their economies more competitive (i.e labor and land reforms).  

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Do not hesitate to give either of us a call at 416 359-7565 or 416-359-7564 or email Sharon Kubicek or Alisa Carli if you have any questions respecting your portfolio and the prevailing investment, economic and political issues at play today.



Sharon and Alisa