Tuesday, April 17, 2007

Can't Slow the Bulls

This market continues to move higher amongst mostly solid earnings announcements. Johnson & Johnson (JNJ) announced numbers that beat expectations and the stock has jumped a couple of percent. It appears that Capital One (COF) will also report a nice quarter. Their stock has been moving higher in the days approaching the announcement, and most financial companies have reported good quarters so far. It appears that the subprime worries haven't affected them as much as anticipated.

Citigroup (C) announced that it will cut a lot of jobs, and it was well received because they have just gotten too big. It is difficult to compare them with Bank of America (BAC), because their focus is a little different. Citigroup has a strong exposure to international markets, while Bank of America is more domestic and deposit driven. From a value standpoint, Bank of America is the better investment, because they are leaner, and are growing faster. Their negative would be their lack of exposure to growing international markets. If you're looking for a combination, I would recommend Bank of America for the domestic side, and Goldman Sachs (GS), which would give you exposure to hedge funds, M&A activity, and international growth.

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