Market Overview

11 Bank Stocks Raymond James Is Buying On The Dip

11 Bank Stocks Raymond James Is Buying On The Dip

  • Bank stocks have not performed well in the past month, with the KBW Nasdaq Bank Index (INDEX: BKX) falling 14.1 percent since July 22.
  • Raymond James analyst David Long said that the firm recommends that investors "put a few chips back on the table" as a result of the "recent market capitulation."
  • Long prefers banks who have "a unique or differentiated product or niche" that can grow, regardless of the interest rate and operating background. Additionally, the firm likes banks that have used capital via M&A to "drive outsized returns on tangible equity and assets."

Since analyst David Long encouraged investors to pare back bets on banking heading into the second-quarter earnings reports, market conditions have changed, which has the analyst reconsidering his stance on banking.

Related Link: Banks Go From "Euphoria To Panic In A Week"

From Outperform To Strong Buy

Specifically, in the wake of a selloff, Long upgraded seven stocks:

  • Bank Of The Ozarks Inc (NASDAQ: OZRK)
  • Hanmi Financial Corp (NASDAQ: HAFC)
  • Preferred Bank (NASDAQ: PFBC)
  • ServisFirst Bancshares, Inc. (NASDAQ: SFBS)
  • Umpqua Holdings Corp (NASDAQ: UMPQ)
  • Mercantile Bank Corp. (NASDAQ: MBWM)
  • Regions Financial Corp (NYSE: RF)
  • From Market Perform To Outperform

    Simultaneously, he upgraded another four stocks:

  • Access National Corporation (NASDAQ: ANCX)
  • First of Long Island Corp (NASDAQ: FLIC)
  • NewBridge Bancorp (NASDAQ: NBBC)
  • For now, Long said that the firm was still "avoiding" taking on "bigger exposure," which would include the energy-exposed banks.

    Buying On The Dip

    For Raymond James, it will be too early to buy the dip in energy-exposed banks until oil finds a bottom. Long predicted that "things are likely to get worse before they get better."

    In general, Raymond James argued that the "rate hope trade" has faded – particularly given the fact that the FOMC could delay any rate hike to 2016. Therefore, "aggressively buying the most rate sensitive names does not make sense for the time being."

    Image Credit: Public Domain


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