Bank stock

Lately Bank stocks have been grabbing the headlines. I bought some bank call warrants few weeks ago when not many people were talking about bank/finance stocks.


Now more and more analysts are recommending bank stocks. Please remember these analysts are merely expressing their OPINIONS. Analysts are not always right. I DON'T really (if not NEVER) rely on their OPINIONS.

In my humble opinion, when analysts are recommending a certain stock, normally it have already gone up a lot before the analysts recommend it.

Lot of analysts are recommending us to buy CIMB. I don't seem to really understand the reasons behind their recommendation.

CIMB is not attracted to me both fundamentally and technically.

CIMB's P/E is 20.26 (5 years average P/E is 15), Public Bank's P/E is 9.79 (5 years average P/E is 14), AMMB's P/E is 15.02 (5 years average P/E is 17), HLBank's P/E is 11.14 (5 years average P/E is 14), Maybank's P/E is 67.31 (5 years average P/E is 14) and RHB's P/E is 10.37 (5 years average P/E is 11).

These are the largest banks in Malaysia. CIMB and Maybank are two of the highest P/E banks. Beside, they are trading far above their 5 years average P/E.

I wonder what will happen to CIMB if our prime minister is no longer around. For your information, CIMB CEO is our prime minister's younger brother.

For me, I prefer Public Bank (Pbbank) and AmBank (AMMB). Their P/E are low compared to others and at the same time their current P/E are lower than their 5 years average P/E.

Besides, Pbbank and Ammb call warrants are some of the lowest premium call warrants listed in KLSE. ammb-cd and pbbank-cj are worth a look.

Ok, good luck.

GOon

my previous related post.
WARNING!!! Don't always follow what analysts say!
http://cathoon.blogspot.com/2009/07/warning-dont-always-follow-what-analyst.html