Goldman Sachs Suggests Selling Calls on Bank of New York
September 06, 2011 9:18 AM
Goldman Sachs is out with a research note this morning, where it suggests that traders sell covered calls on The Bank of New York Mellon Corporation (NYSE: BK) to generate yield.
Goldman's analysts noted that near-term upside in the name is likely limited, given that the increase in uncertainty related to Bob Kelly's departure (with no clear explanation) has caused investors to be skeptical of the permanence of any new plans that have been or are to be announced by management in the near-term.
The analysts noted, “This skepticism may make it difficult for shares to rally meaningfully in the near-term. Furthermore, we see risk to consensus EPS estimates amid a weak market backdrop.”
The analysts suggest selling the January $24.00 call for $0.72.
The Bank of New York Mellon Corporation is a global financial services company. As of December 31, 2010, the company's two principal banks were The Bank of New York Mellon, which houses its institutional businesses, including asset servicing, issuer services, treasury services, broker-dealer and advisor services and the bank-advised business of asset management, and BNY Mellon, National Association, which houses its wealth management business.
