This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Charge Into Wells Fargo, Charles Schwab

NEW YORK ( TheStreet) -- Financial stocks may have regained their stride since the depths of the financial crisis, but they still have a way to go as the housing market recovers, says Mark Oelschlager, portfolio manager for Pin Oak Equity Fund (POGSX).

The large-cap blend fund, which garners three stars from Morningstar, has returned 14% year-to-date, beating the S&P 500 by over a full percentage point.

Welcome to TheStreet's Fund Manager Five Spot, where top fund managers give their best stock picks and views on the market in a five-question format.

Why has your fund outperformed so far this year?

Oelschlager: A good portion of the outperformance of the fund is the result of our bet on the financial sector, which has led the market in 2012. Because of what happened in the financial crisis, this was the most unloved area of the market for a couple years, and that led to some great values. While we were, and still are, very cognizant of the headwinds the sector faces, the stock prices more than accounted for those, and as we looked out a couple years, we saw the potential for better loan growth and net interest margins. What's interesting is that the stocks have actually rallied this year without much improvement in those areas, but the market is seeing the improving housing data and in our opinion correctly concluding that this will translate into a better environment for financials.

What is your top stock pick?

Oelschlager: Our top pick is most certainly Wells Fargo (WFC - Get Report). It's a leading mortgage company that doesn't take a lot of risks. Despite the recent run in the stock, it trades at just 10x 2012 EPS and a modest premium to book value. Recently it increased its dividend by over 80%. While the housing stocks have been roaring and are highly valued, lenders like Wells are still moderately priced even though they are driven by many of the same factors.

What is your top "sleeper" or "under the radar" stock pick?

Oelschlager: While it's a well-known company, I call Charles Schwab (SCHW - Get Report) a sleeping giant. Its earnings power has been dramatically reduced due to 0% short-term rates, as it forces the company to waive hundreds of millions of dollars in fees on its money market funds every year in order to prevent an investor's return from becoming negative. This has kept a lid on the stock.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SCHW $28.00 0.00%
WFC $50.00 0.00%
AAPL $95.18 0.00%
FB $117.43 0.00%
GOOG $692.36 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs