Bank on Goldman - Cramer's Stop Trading! (9/22/09)

Recap of Jim Cramer's comments on Stop Trading! Monday September 22.

Bank on Them – Goldman Sachs (GS), Morgan Stanley (MS), Wells Fargo (WFC), US Bancorp (USB), PNC Financial Services Group (PNC)

Goldman Sachs and Morgan Stanley are “best in show” stocks, Cramer said during Monday’s Stop Trading!, and deserve better share prices than the market’s giving them. “Goldman is getting no credit whatsoever for its earnings,” said Cramer. There's been a series of stories about how Goldman's not going to be able to make as much money. "This is just ridiculous," Cramer said. "This is about the prime brokerages all pulling out at the same time," he said. "It was never about M&A. It was never about most of the things Goldman does." For example, according to Cramer, Goldman has 11% Tier 1 capital. "This is kind of ludicrous that 11% Tier 1 is actually worse than banks that have huge amounts of home equity." Both Morgan Stanley and Goldman Sachs were trading down after receiving unanimous approval from the Federal Reserve to become bank holding companies. This will allow Goldman and Morgan to create commercial banks that hold deposits like Wells Fargo and Bank of America. Goldman's multiple is seven times earnings, he said, and Morgan Stanley's is six times earnings. "US Bancorp, Wells Fargo, PNC Financial Services Group all have multiples between 14 and 17 times earnings. Do some homework before you start talking about the multiple." Goldman and Morgan "are best in show," said Cramer. "I'm surprised that Goldman isn't up, but you can knock anything down today."

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Comments

[Ishortyou:]

uncertainties are driving them down, the more they hold them at unknown price the more punish they will get from the market, so they better come clean and show the junk they hold even at zero prices.

2008 Sep 22 05:31 PM

[DrGREEN:]

Cramer who?
did you see Jon Stewart joke?
Cramer asked us to buy Bear Stern @ $28 , two days later it dropped to $2.00

2008 Sep 22 09:56 PM

[omooc:]

Other commentators, over CNBC, invariably suggest viewers to avoid financials. Cramer is indeed brave in taking a contrarian view. I did not seem to have read his reasoning for his recommendation.

2008 Sep 22 10:14 PM

[omooc:]

I forgot to ask a question -- I apologize for its being relevant to the topic but not specifically to Cramer's commentary. The question is this: Viewing tapes crossing the bottom of CNBC, I noted that FXP (financial short ETF) was up 7+ dollars today (9/22), but SKF (financial double short ETF) was up only nominally, from 5 cents to a dollar or two -- theoretically, the latter should double that of the former, or 14+ or so. Why this did not come about?

2008 Sep 22 10:20 PM

[bynd2009:]

FXP is specific short on the Chinese market, not necessarily the financials. Further, SKF appears to be hobbled by the ban on the "shorts" even though Proshares assured that its portfolio does not short individual financial issues

2008 Sep 22 10:41 PM

[Dr. Duru:]

Why is Cramer surprised GS was down on Monday? He advised his own viewers to sell into the Th/Fri rally. Jim Cramer can be all over the place and hard to follow for actionable advice.

2008 Sep 23 09:22 AM