Finding The Best BanksWritten by Ophir Gottlieb, 01-06-2015
Although the main stream headlines would tell you otherwise, it turns out that finding the best stocks to invest in actually isn't hard -- it just requires access to information that Wall Street has fought for a lifetime to hide from the public.
Wall Street just lost that fight.
Now that statement was easy enough to write, but finding those precious few gems isn't quite that easy... Or it hasn't been until now.
Let's take every bank of all types (diversified, regional, thrift, and mortgage finance) over $5 billion in market cap and plot one simple measure: Non-performing loans over total loans.
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A non-performing loan is defined as:
A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 90 days, but this can depend on the contract terms.
In the chart above we see that the bank with the largest proportion of total loans that are marked as non-performing is Credicorp Ltd. (BAP ). The stock is down 40% in the last year.
On the other side, we see the two banks with the smallest proportion of total loans that are marked as non-performing are FRC and SBNY. Those two banks have seen their stock prices rise 23% and 20% in the last year, respectively. In fact, one of those two banks has been earmarked as the single best bank stock in the world by CML Pro.
WHY THIS MATTERS
The top analysts, asset managers and hedge fund managers are keenly aware of the data that will move markets like the chart we addressed above. This is how they pick their stocks even if the market goes sideways or down. If we're not using this data, then we're trading against people that simply have more information then we do. And this is just one piece of data, can you imagine if you had the six metrics that measure the value of a bank all in a chart?
Data like this, until now, has been kept away from retail investors, especially in a format that's so easy and so fast to digest. The information asymmetry that exists between pros and non-pros has transferred massive wealth to the top 1%. That information asymmetry is no longer acceptable to us. In fact, it infuriates us.
This is just one of the fantastic reports CML Pro members get along with all the charting tools, top picks for 2016, research dossiers and alerts. For a (very) limited time we are offering CML Pro at a 90% discount for $10/mo. with a lifetime guaranteed rate. Join Us: Get the most advanced premium research delivered to your inbox along with access to visual tools and data that until now has only been made available to the top 1%.
Thanks for reading, friends.