By Osman Gulseven:

Financials have been the disaster of 2011. Their market caps were slashed by significant amounts in 2011, primarily due to eurozone concerns. While major European Banks were the biggest losers, the panic in the sector was contagious. Bank of America (BAC) lost 62%; JPMorgan (JPM) lost 31% and Citibank (C) lost 47% in 2011. Even banks that have strong balance sheets with minimal exposure to risky assets, such as Wells Fargo (WFC), could not resist the bearish outlook in the sector. Wells Fargo, a Warren Buffett favorite, lost 22% in 2011.

I have been looking for a signal of recovery to buy some financials for a while. They are trading at their historically low, single digit, P/E ratios. Surely the dividend cuts by major banks were a colossal disappointment for income-oriented investors, but banking stocks look insanely cheap after losing almost half of their market caps since January.

While I

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