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Deutsche Bank (DB) is among the world’s most profitable investment banks. Last year, the company earned $2.69 billion in advisory fees. Deutsche Bank did not need any bailout during the subprime crises. It actually benefited from it, by acquiring Deutsche Postbank, Sal Oppenheim, and ABN Amro’s Netherlands business at steal prices. Deutsche Bank is one of the largest institutional investors in the stock market. The investment titan offers several mutual funds and private wealth management services through DWS Investments (the retail mutual funds business). While Deutsche Bank is a European company, based in Frankfurt, Germany, its US operations require the investment giant to file 13F holdings report.

As of the 2011 second quarter, Deutsche Bank had a well-diversified portfolio of U.S. equities. Financial stocks constitute 20.52% of the holdings, followed by services (18.58%) and technology stocks (17.15%) companies. Energy stocks constitute 9.68% of the portfolio. According to Edgar Online, Deutsche Bank increased its ownership of 2862 stocks, while opening 409 new positions in the last quarter. I have examined the boldest 7 buys from a fundamental perspective, adding my O-Metrix Grading System where applicable. (Data obtained from Finviz/Morningstar and is current as of Aug.19)

Company Name

Ticker

Shares Held

% Change

% of TSO*

O-Metrix Score

CDN Imperial

CM

9.39 million

500%

2.36%

6.47

Taiwan Semiconductor

TSM

55.02 million

685%

1.06%

9.09

Apple

AAPL

7.95 million

21.83%

0.86%

8.34

Google

GOOG

2.17 million

50.48%

0.86%

6.51

TransCanada

TRP

14.11 million

156.63%

2.01%

3.61

Intel

INTC

51.53 million

52.96%

0.98%

9.08

Microsoft

MSFT

60.23 million

18.28%

0.72%

7.91

*TSO: Total Share Ownership by the Deutsche Bank Funds

Canadian Imperial Bank of Commerce is one of the largest money center banks in Canada. As of Aug. 19, it had a market cap of $28.79. The company made $2.49 billion in profits in the last 4 quarters. Deutsche Bank owns 9.39 million shares and increased its holdings by 500% in the last quarter. Total share ownership stands at 2.36%. The stock is trading with a trailing P/E ratio of 11.08 and a forward P/E ratio of 8.66. It pays a nifty yield of 5.1%. Analysts estimate an annualized EPS growth of 7.67% for the next 5 years. The stock lost 18% in the last quarter, providing an entry point below $70. It has an O-Metrix score of 6.47.

Taiwan Semiconductor is one of the largest semiconductor and integrated circuit producers in the world. In addition, the company provides multi-project wafer processing services and technology platforms to integrated device manufacturers. Deutsche Bank owns 55.02 million shares and increased its holdings by 685% in the last quarter. Total share ownership stands at 1.06%. As of Aug. 19, the stock is trading with a trailing P/E ratio of 10.32 and a forward P/E ratio of 11.40. Company pays a yield of 4.74%. Analysts estimate an annualized EPS growth of 15% for the next 5 years, which is attainable given the 17.38% EPS growth of the past 5 years. 52 week trading range is $8.94 - $13.48. With a price of $10.94, the stock is trading at the middle of its trading range. It has an A-Grade O-Metrix score of 9.09.

Apple, a Cramer favorite, is also favored by Deutsche Bank. Deutsche Bank owns 7.95 million shares and increased its holdings by 21.83% in the last quarter. Total share ownership stands at 0.86%. Apple, the world's largest high-tech company, has a remarkable growth record. In the last 5 years the company was able to boost its earnings by a whopping 60.03% annually. In 2006, EPS was $2.27, whereas the ttm [trailing twelve month] EPS is $25.26. Apple, a relatively small high-tech company of the last decade, became a truly global titan. It is also the most popular stock among hedge funds, as well as Apple fans. As of Aug 19 close, the stock was trading at $356 with a ttm P/E ratio of 14.09, and forward P/E ratio of 11.09. Wall Street has diversified opinions on Apple's future. The bottom line is 7.2% growth, where the top line annualized growth estimate is 34.1%. Average five-year growth forecast estimate is 20.85%. My FED+ fair value range for Apple is $363 - $430. The stock is trading below my fair-value estimate. It has an O-Metrix score of 8.34.

Google’s last quarter earnings came as a big surprise to the investors. The stock instantly jumped from $540 to $590 after the earnings announcement. However, in the last month, the stock lost 19.12%, retreating back to $490 level. Deutsche Bank owns 2.17 million shares and increased its holdings by 50.48% in the last quarter. Total share ownership stands at 0.86%. Google is an immensely profitable company with a gross margin of 65.18% and a net profit margin of 27.04%. The year-to-date return of -17.35% is highly disappointing. The company has a Beta value of 1.12 with a 14-day average true range of 20.90. As of Aug 19, Google was trading with a ttm P/E ratio of 17.7 and a forward P/E ratio of 11.78. Google has a 4-star rating from Morningstar. Wall Street has diversified opinion on Google's future. The bottom line is 6.5% growth, whereas the top-line growth estimate is 25.9% for the next year. Average five-year annualized growth forecast is 19.14%. My FED+ fair value range for Google is $646 - $796. The company has an O-Metrix score of 6.51.

TransCanada is an energy infrastructure company headquartered in Calgary, Canada. The company operates electrical power generation plants, natural gas and oil pipelines across North America. Deutsche Bank own 14.11 million shares and increased its holdings by 50.48% in the last quarter. Total share ownership stands at 2.01%. The company pays a nifty yield of 4.38%. Trailing P/E ratio is 19.82, and forward P/E ratio is 16.57. Analysts estimate an annualized EPS growth of 7.95% for the next 5 years. TransCanada has an O-Metrix score of 3.61.

Intel, the glorious winner of the microchip battle, is in Deutsche Bank’s big buy list. Deutsche Bank owns 51.53 million stocks and increased its holdings by 52.96% in the last quarter. Total share ownership stands at 0.98%. As of Aug 19, the company had a market cap of $100.77 billion with a trailing P/E ratio of 8.8, and a forward P/E ratio 7.7. In the last 5 years, earnings per share increased by 7.5%. My FED+ fair value range for Intel is $26-$34. As of Friday’s close, Intel was trading for $19.19, which is significantly lower than my fair value estimate. While I do not expect this gap to be closed in a short period of time, I think Intel will beat the market returns with a large margin. If the analyst estimates hold, and if Intel continues to reward shareholders with nifty dividends, an excess-market return above 10% is easily attainable. The company has an A-grade O-Metrix score of 9.08.

Microsoft is one of the largest information technology companies. Microsoft is an immensely profitable company with a gross margin of 78% and net profit margin of 33%. For some reason, the Street does not appreciate Microsoft's profitability. The year-to-date return is -12.49%. Deutsche Bank is bullish on the stock and owns 60.23 million shares with a total share ownership of 0.72%. As of Aug 19 close, Microsoft was trading at $24.05 with a trailing P/E ratio of 8.91 and a forward P/E ratio of 7.63. Microsoft has a 4-star rating from Morningstar. Wall Street has diversified opinion on Microsoft's future. The bottom line is 0.4% growth, whereas the top-line growth estimate is 16.3% for the next year. Average five-year annualized growth forecast is 11%. I think the stock is vastly undervalued. My FED+ fair value range for Microsoft is $40-$46. The company has an O-Metrix score of 7.91.

5 out 7 of Deutsche Banks’ bold buys are in the technology sector. I agree with Deutsche Bank fund advisors that technology stocks offer the best value in the market. That is why; I am also heavily invested in technology stocks.

Disclosure: I am long AAPL, MSFT, INTC.

Source: 7 Big Buys By Deutsche Bank