NEW YORK (TheStreet) -- The financial sector, especially some of the big banks and the best-managed regional banks, had a good year in 2012.
Who would have dreamed at the end of 2011 that Bank of America (BAC) would go up more than 100% in 2012!
Among the many astute analysts, TheStreet.com's Jim Cramer believes, "The days of the radical revaluation of banks is now upon us. The days when we sit there and say 'they are awful because of the net interest margins' are being put behind us. The days when we worried about the government every minute are behind us, too."
In an editorial today titled "New View on Banks Starts Today" Cramer opined, "Now it is just time to make money and it is important to recognize that because of the difficulties of the previous era and how hard it is now to run the new gauntlet of regulations, there will only be a handful of companies that can dominate in each space and they will make fortunes."He cited Goldman Sachs (GS), which reported blow-out earnings and revenue Wednesday. GS reported that in its fourth quarter ending Dec. 31 it had earnings of $5.60 per share, $1.96 better than the Capital IQ consensus estimate of $3.64. Revenue rose 52.7% year over year to $9.24 billion versus the analysts' consenus estimate of $7.67 billion. No wonder the shares of GS rallied over 4% on the news on double the average daily volume. We're getting excited about other promising investment bank and regional bank earnings reports. Recently, I wrote a timely article on "Identifying Stocks That May Double within a Year." In it I made reference to swirling reports that Morgan Stanley (MS) may be the next financial that sees its stock price double in the year ahead. In my article I wrote, "You may have seen the Bloomberg article on Wednesday, Jan. 9, quoting Daniel Loeb, who runs the hedge fund Third Point LLC. The Bloomberg headline read, 'Morgan Stanley Shares May Double, Loeb's Third Point Says.'" The article quoted Loeb as saying: "Morgan Stanley shares may double as brokerage margins improve and management devises a 'bold fix' for the fixed-income trading business. The hedge fund bought shares at an average cost of $16.77, 15% below [Jan. 8th's] close of $19.65," Third Point said Jan. 9 in a letter to investors.
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