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Barclays goes bullish on U.S. credit card issuers, saying earnings will increase steadily over...

Barclays goes bullish on U.S. credit card issuers, saying earnings will increase steadily over the next 3-5 year, and that it's encouraged by what appear to be signs of stabilization in default rates. Firm boosts American Express (AXP +2.4% premarket), Capital One (COF +2.7%) and Discover (DFS +7%) to Overweight.
Comments (10)
  • Vieira Trading
    , contributor
    Comments (133) | Send Message
     
    Barclays is late to the game as usual, their upgrade based on 2012 earnings make no sense, they're just trying to gather more momentum. We warned investors in due time here: Beyond Trading on (COF): Trading Against the Crowd seekingalpha.com/a/3bpb
    24 Aug 2009, 09:13 AM Reply Like
  • Archman Investor
    , contributor
    Comments (2566) | Send Message
     
    Heck why not?
    Of course you could have bought AMEX 100% ago when the gov't basically said it was going to backstop the company. But why do that? Might as well wait for some brokerage house to come out and "tell you" its OK to buy the stock.
    No thanks. Every indicator out there says defaults are still enormous, and no one really knows what is going to happen if and when the government stops backstopping the firms (or everything else in this country).

     

    compdivplan.com
    24 Aug 2009, 09:14 AM Reply Like
  • Archman Investor
    , contributor
    Comments (2566) | Send Message
     
    <<Barclays is late to the game as usual, their upgrade based on 2012 earnings make no sense, they're just trying to gather more momentum.>>

     

    BeyondT:
    Thank you for telling it like it is!
    Kudos!
    24 Aug 2009, 09:15 AM Reply Like
  • Danny Furman
    , contributor
    Comments (1008) | Send Message
     
    But how much credit will people want/abuse? Recovery should require less credit for the American consumer, assuming he starts producing for the first time in decades. This upgrade is fine by me and gives COF farther to fall... Thankfully not short yet...
    24 Aug 2009, 09:19 AM Reply Like
  • coloneldebugger
    , contributor
    Comments (907) | Send Message
     
    it's hard to believe their earning are going to go up when they're jacking their interest rates up 3, 4, 5 percent a shot every few months.
    24 Aug 2009, 09:20 AM Reply Like
  • Jake Huneycutt
    , contributor
    Comments (1376) | Send Message
     
    You gotta love how they always wait till after a sector has a major run to "upgrade" to overweight. I recommended buying into Discover (DFS) under $7:

     

    seekingalpha.com/artic...

     

    While I still believe it's slightly undervalued, I'd consider the portfolio and regulatory risks to be high enough, so that I find myself much more neutral now that it trades in the $13 - $15 range.

     

    Since I made my call, I believe that the outlook for credit card companies has gotten slightly worse. For the time being, DFS is probably fairly valued around $15. It may, in fact, be worth more than that, but recent Congressional legislation combined with high unemployment are not good for the industry. A few months ago, all this stuff was (over-)priced in; that's not necessarily the case any more after the run-up.

     

    I don't follow AXP and COF enough to know if the same holds true for them.
    24 Aug 2009, 09:20 AM Reply Like
  • Vieira Trading
    , contributor
    Comments (133) | Send Message
     
    In our opinion (COF) is overvalued at this price and in fact this game of upgrading stocks after 300% should be forbidden since Barclays never downgraded the stock when it crashed. For us they have zero credibility

     

    On Aug 24 09:15 AM Archman Investor wrote:

     

    > <<Barclays is late to the game as usual, their upgrade based on 2012
    > earnings make no sense, they're just trying to gather more momentum.>>
    >
    >
    > BeyondT:
    > Thank you for telling it like it is!
    > Kudos!
    24 Aug 2009, 09:25 AM Reply Like
  • doubleguns
    , contributor
    Comments (8429) | Send Message
     
    Amen.

     

    On Aug 24 09:25 AM Beyond Trading wrote:

     

    > In our opinion (seekingalpha.com/symbo...) is overvalued
    > at this price and in fact this game of upgrading stocks after 300%
    > should be forbidden since Barclays never downgraded the stock when
    > it crashed. For us they have zero credibility
    24 Aug 2009, 09:30 AM Reply Like
  • lower98th
    , contributor
    Comments (1420) | Send Message
     
    You can't make this stuff up.

     

    If you are one of the 10 million more Alt A & Option Arm foreclosures ahead, assuring that your credit will soon be trashed, you need a Before-Default Strategy:
    1. Keep paying your mortgage and minimum due on all credit cards until you have executed your plan.
    2. Tap all available non-recourse credit. Reactivate dormant credit card accounts, and apply for more.
    * If you have a spouse or partner you may be able to trash credit of partner A, and preserve credit of partner B.
    3. Get maximum cash advances
    4. Save the cash.
    5. Max out all cards, using proceeds to purchase easily saleable items (gold jewelry, for example), and sell for cash.
    6. Save the cash.
    7. Prepare for transition housing. Even with bad credit, you can rent with 1-2 years rent in savings. Find out the requirements of various property/apartment managers and make sure you can meet them.
    8. Consider buying a foreclosure yourself, if your acquired cash allows. Clue in family or friends who can float a private mortgage (read: cash purchase) for a new property with your ample cash downpayment. Consider any extended family co-housing offers (move-in-with-mom).
    9. Stop paying your mortgage, But Do Not Move.
    9. Stop paying on all non-recourse loans.
    10. Take minimally adequate care of the property so its appearance does not deteriorate. This slows reaction time of property preservation companies.
    11. Exploit this rent-free housing until you are actually evicted.

     

    Recognize that there is no longer any stigma to being "foreclosed." Further, the credit hit of a Foreclosure is so punitive that defaulting on lesser loans are not additive.

     

    12. When evicted, activate your alternate housing plan.
    13. Go free, go far. In seven years you will again be golden.
    24 Aug 2009, 01:24 PM Reply Like
  • Anthony Alfidi
    , contributor
    Comments (599) | Send Message
     
    Barclays' analysts are even dumber than Citi's! Credit card default rates are going to disappoint everyone after this year's Christmas season. Go ahead and act on institutional research if you enjoy losing money. :-(
    25 Aug 2009, 12:46 PM Reply Like
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