NEW YORK (TheStreet) -- U.S. Bancorp (USB) and KeyCorp (KEY) were downgraded Wednesday and TheStreet's Jim Cramer and Stephanie Link, co-managers of the Action Alerts PLUS portfolio, disagreed. Both stocks are AAP holdings.
Cramer said KEY is located in an area of the country that's doing great thanks to oil and natural gas in the Utica shale. He said the stock can get back to its previous levels near $35 to $40 because "it's better now" than in the past.
Link concurred and said the downgrade occurred because the stock was up 60% in 2013 and a repeat performance was unlikely.
However, she argued that despite the run, KEY is still trading below its peer group based on a tangible book value basis. She thinks increased operating leverage will be important in 2014.
Turning to USB, Cramer said the downgrade "annoyed him" because USB has added some great branches and has historically been one of the best banks in the country. Its steady stream of earnings should equate to a sizable share buyback program and nice dividend.Link added that USB should trade at a premium compared to its peers, given its returns. Cramer concluded that it's imperative for investors not to lose conviction because of short-sighted analyst views such as these.
-- Written by Bret Kenwell in Petoskey, Mich.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV