Re. Banks:
thestreet.com
And this:
siliconinvestor.com
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UPDATE1-Prudential's Mayo strikes bearish stance on banks
NEW YORK, March 8 (Reuters) - Straight-talking Mike Mayo struck his first blow as Prudential Securities' top bank analyst on Thursday, starting coverage with a strong buy on just three banks, while issuing sell recommendations on nine banking companies and a hold on seven others.
Mayo, who was hired in February, liked Bank of America Corp. (NYSE:BAC), Citigroup (NYSE:C) First Union Corp. (NYSE:FTU), but rated a sell Bank of New York Co. Inc. (NYSE:BK), Mellon Financial Corp. (NYSE:MEL) and No. 4 U.S. bank holding company Bank One Corp. (NYSE:ONE), among others.
Mayo said in a research report earnings growth in banking this decade would be only about half that of the 1990s, a decline to 7 percent from 16 percent. Earnings will fall short if economic growth, capital markets or interest rates are worse than expected, Mayo said, according to Prudential.
Mayo has a reputation for forthright opinions and is best known for telling investors to sell 40 regional bank stocks in May 1999, an unusual practice on Wall Street, where only 1 percent of analyst recommendations are sell or strong sell.
The other sell recommendations were for National City Corp. (NYSE:NCC), State Street Corp. (NYSE:STT), KeyCorp (NYSE:KEY), FleetBoston Financial Corp. (NYSE:FBF), U.S. Bancorp (NYSE:USB) and Wachovia Corp. (NYSE:WB).
Mayo issued hold recommendations on J.P. Morgan Chase & Co. Inc. (NYSE:JPM), BB&T Corp (NYSE:BBT), Comerica Inc. (NYSE:CMA) Fifth Third Bancorp (NASDAQ:FITB), PNC Financial Services (NYSE:PNC), SunTrust Banks Inc. (NYSE:STI) and Wells Fargo and Co. (NYSE:WFC)
BEARISH BUT STRAIGHT-TALKING
Mayo has consistently distinguished himself from others in the analyst community, said Wayne Nordberg, vice chairman at KBW Asset Management.
"A lot of the intellectual fraud that was perpetrated as investment opinions is being flushed out and always happens in a bear market," he said. Mayo "has taken some very unpopular positions, and I think he has been more right than not."
Mayo was fired by Credit Suisse First Boston Mayo in September last year, as it bought securities firm Donaldson Lufkin & Jenrette and replaced him with the DLJ analyst team.
Wall Street analysts normally do not put sell ratings on stocks, for fear their firms will lose business helping those same companies with mergers or new stock offerings.
Prudential has moved to beef up its research ever since it said would pull away from investment banking. The company also has said it will be more aggressive in its research, and will not shy away from issuing sell recommendations.
Prudential has lagged its larger rivals like Morgan Stanley Dean Witter & Co. (NYSE:MWD) and Merrill Lynch and Co. Inc. (NYSE:MER) in winning investment banking business to help companies with new stock offerings and mergers. |
