Your Best Financial Bets: UBS, Credit Suisse

You want to be brave? You desperately want to go financial? Then go Suisse!

Without a further detailed and elaborated discussion about how beaten down financial stocks and investments banks are, where one's portfolio loaded with financials surely must have looked like the roller-coaster ride in the last few months, with ups and downs at every upbeat and  negative news, one cannot just sit on the sidelines and not wonder if he or she should use this opportunity that comes once in the lifetime (well, at least you'd hope).

Should one start nibbling on stocks of these "horrific" companies, or is it too early- should one wait? Well, as Warren Buffet would often say, buy when they fear. But do they fear enough yet?

All these credit losses, subprime problems and shrunk balance sheets- why would one even buy in these terrible conditions? But those are the best times to buy solid and strong companies that are to stay here with us for a loooooong time. So, if you are a long-term investor, you could consider nibbling some of the names for your long-term portfolio. I mean, they've been down huge over the last few months, some of them are trading at one or almost two-year lows, and they are still solid businesses with tremendous growth ahead (not just in the US, but outside, and that's what matters). Plus their great dividend payouts are just to wish for.

But which ones to get? Is it time to load up on beaten-down Merrill Lynch (MER) yet? Or how about Citigroup (C)? Perhaps, but technically I am not ready for these two yet (which doesn't mean that technicals will not improve within this or next week). These two have first some things to sort on their own (one should perhaps throw their CEO out, the other needs to find a new one). There are other US investment houses that one could look into, such as Bank of America (BAC), or Wachovia (WB), and obviously Goldman Sachs (GS), Lehman Brothers (LEH) or Morgan Stanley (MS). But those have been discussed already. For long-term investors who want to get in the safe and strong companies at their bottoms, I would this time like to recommend going Suisse.

UBS Ag (UBS) and Credit Suisse (CS) have been punished much more than they should have been based on disastrous performance of their American counter-peers. And all the banking fear should have already been fully priced in their shares. The situation is, however, not so rosy, so one should evaluate when the situation is ripe, but in my case, these two Suisse companies have already gone through all the bad US news already, and are setting up for a nice rally ahead. Yes, yes, we are in the global economy, and everything that happens at home in the US should affect the rest of the world too, and these mortgage problems are not just going to disappear so easily, I'm sure. But once one understands that these entities are rock-hard and here to stay, then one can feel good by being a part of a major financial recovery. And what is the best entry? At the lows. I personally believe that Suisse's UBS and CS are already there (see charts below). Rating CS as Accumulate; first target $71. UBS is Accumulate as well; first target $57.

Disclosure: Author has a long position in UBS and CS