As this record bull market keeps chugging along, it seems as though there aren’t any stocks that haven’t benefited from the slow steady rise of the market. And as a value investor, this can make investing in this climate challenging. Are there any good deals out there? The answer is yes, and the best value play are bank stocks.
Why do I suggest that the best value play are bank stocks right now? As the market keeps rising, these stocks tend to stay stuck in place, not making any price moves higher. As a result, there are some good names in this sector that you can buy.
In this post, I am going to highlight the 3 best banks for a value investment.
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The Best Value Play Are Bank Stocks Why?
Before we get into the best bank stocks, we need to take a minute to understand why Wall Street is “punishing†these stocks.
There are a couple of reasons.
- Rising interest rates. As interest rates rise, it costs banks more money to borrow and this hurts their bottom line.
- Trade war. As the trade war continues, this indirectly hurts bank stocks as the businesses they have accounts with might see a slowdown, thus bringing the banks less income.
- Bull market. Not so much that the bull market is the reason, but people are starting to talk about the end of this run.
While all of these are valid worries, none holds much weight. Interest rates are rising, but ever so slightly, thus they shouldn’t have a large impact on the bottom line.
Next, the trade war is more hype than hurt. Yes it is having an impact, but not to the degree that the media is making it out to be.
Finally, when a bear market does come, you can expect the stock market to suffer. However, since the best value play are bank stocks, I don’t see these stocks getting hit as hard as other stocks.
3 Great Bank Stocks Right Now
#1. Â Wells Fargo (NYSE:Â WFC)
Wells Fargo is still feeling the effects of the scandal that plagued them last year. But this is a good thing for investors.
