Top Investor Says Bank Stocks Could Double in 12 Months

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 |  Includes: BAC, C, JPM, SNV, XLF
by: Hawkinvest
In a new CNBC article, Doug Kass of Seabreeze Partners states "I'm also making a medium term call. I think banks' stocks can almost double within the next 12 months." The article goes on to say:

Largely, Kass thinks most investors don’t understand what’s going on in the banking sector. He thinks weakness has a whole lot to do with forced liquidations from big money hedge funds and exaggerated moves due to high frequency trading. Also, he sees some tailwinds in the way of low interest rates which Kass calls, "a silver lining for the banking industry." And he says franchise values are enormous relative to the current stock prices.

With bank stocks trading below book value in many cases, and the sentiment so negative, this could be the classic buy low opportunity. Here are a number of banks that might be poised for big gains from low levels over the next 12 months:
Bank of America (NYSE:BAC) is a banking and financial services giant. This bank is facing challenges with mortgages and foreclosures and the stock has recently sold off on concerns of a double dip. But, many smart investors like Trump are buying shares at what looks to be bargain levels.

Here are some key points for BAC:
Current share price: $7.01
The 52-week range is $6.31 to $15.31
Earnings estimates for 2011: loss of 25 cents per share
Earnings estimates for 2012: profit of $1.51 per share
Annual dividend: 4 cents per share, which yields .6%

Financial Select Sector (NYSEARCA:XLF) is an ETF with diversified stock holdings in many large banks and financial stocks. Doug Kass is buying this ETF and believes it will return strong results in the next year.

Here are some key points for XLF:
Current share price: $12.38
The 52-week range is $12.04 to $17.20
Earnings estimates for 2011: n/a
Earnings estimates for 2012: n/a

Citigroup, Inc. (NYSE:C) is a banking and financial services giant. Almost every financial stock has been in declining and Citigroup is no different. Citigroup appears to have fewer challenges from housing compared with some banks and it also has key exposure to emerging market economies.

Here are some key points for C:
Current share price: $27.98
The 52-week range is $26.25 to $51.50
Earnings estimates for 2011: $4.10 per share
Earnings estimates for 2012: $5.22 per share
Annual dividend: 4 cents per share, which yields .1%
Synovus Financial Corp. (NYSE:SNV) is a regional bank with operations in Georgia, Alabama, South Carolina, Florida, and Tennessee. This stock was trading in the $2 range just a few days ago. An investor with patience could see a turn around in 18 months to two years from now. This stock could triple in the long run.

Here are some key points for SNV:
Current share price: $1.37
The 52-week range is $1.18 to $2.99
Earnings estimates for 2011: a loss of 21 cents per share
Earnings estimates for 2012: a profit of 17 cents per share
Annual dividend: 4 cents per share, which yields 2.6%
Book value: $2.47 per share

JP Morgan Chase (NYSE:JPM) is one of the best managed and largest banks in the United States. JPM is one of the best managed banks in the market and at less than 8 times 2012 earnings and below book value, it could bounce back quickly.

Here are some key points for JPM:
Current share price: $35.19
The 52-week range is $33.69 to $48.36
Earnings estimates for 2011: $5.02 per share
Earnings estimates for 2012: $5.67 per share
Annual dividend: $1 per share, which yields 2.7%
Book value: $44.23 per share

Data sourced from Yahoo Finance. No guarantees or representations are made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.