Why LSE Stock Has Outperformed over the Years
The London Stock Exchange’s high market share in growth areas such as client clearing, along with its good asset quality, suggest that the stock exchange is on solid ground.
Visa (V) boasts a significant advantage in terms of its worldwide acceptance. This availability lent to the network effect’s being the source of the company’s moat.
Just as early snowmelt or increased rainfall in the Rocky Mountains will swell the Colorado River come springtime, so too do Upstream announcements eventually lead to increased opportunities for midstream companies.
Over the past six months, Tesoro Logistics (TLLP) returned 14.9%, beating the AMZ by 11.8%.
MLPs have secondary equity offerings like I buy new plants—in other words, every time I see an opportunity.
The financial sector has performed the best since the elections. Higher interest rates are likely to improve banks’ margins going forward.
Since the beginning of 2016, the financial sector has been whipsawed by worries of a global recession and a low interest rate environment.
In a Reuters survey of 38 analysts, eight analysts assigned a “strong buy” rating to Bank of America (BAC), and 16 rated it as a “buy.”
In June 2016, the Federal Reserve approved Wells Fargo’s (WFC) capital plans after it determined that the bank could continue its lending program during a severe economic slump.
Bank of America trades at a PBV of 0.87x, which implies an ~14% discount to its book value.
Bank of America (BAC) reported a 11% yearly gain in trading revenues in 4Q16.
In 4Q16, Wells Fargo’s (WFC) Wealth Management unit recorded profits of $653 million, 10% higher year-over-year while its revenues rose 2.5% to $4.1 billion.
Since Donald Trump’s presidential victory, Wall Street analysts have raised their forecasts for the major banks’ (XLF) net interest margins as they anticipate rising interest rates and economic growth.
Wells Fargo (WFC) seems fairly secure with respect to risks arising from energy-related loans, as its $14.8 billion energy loan portfolio comprises ~1% of its total loan portfolio.
Along with Wells Fargo and Bank of America, JPMorgan Chase (JPM) and Citigroup (C) have also been struggling with compressed margins and are hoping for another rate hike.
Since the 2008 financial crisis, Wells Fargo and Bank of America have been focusing extensively on expense control mechanisms.
From 2014–2016, Wells Fargo’s (WFC) loan portfolio grew 13%, second only to JPMorgan Chase’s 16% loan growth.
President Donald Trump strongly supports the idea of relaxing regulatory burdens for the financial sector.
In 2016, Wells Fargo’s (WFC) revenues rose 3% to $88.3 billion, while revenues of Bank of America (BAC) grew 1% year-over-year to $83.7 billion.
Like other banks, Bank of America (BAC) and Wells Fargo (WFC) stand to benefit from interest rate hikes. Net interest income forms ~50% of their revenues, and rising interest rates could drive growth.