Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines:
Stock number one: Bank of America Corporation
Bank of America's Cost Cutting Will Face Scrutiny- Yahoo Finance
Bank of America (BAC_) is set to report earnings Wednesday morning, and once again the focus will be on how well the bank is doing at cutting expenses.
Analysts are looking for the bank to earn 27 cents per share, compared to 28 cents during the third quarter and 29 cents during the fourth quarter of 2012.
"We doubt that weak Q4 results will have a significant impact on share prices with investors far more focused on core earnings trends for the year ahead," argued Atlantic Equities analyst Richard Staite in a Dec. 19 preview of the banking sector.
Note: Price to book: 0.80
Trailing PE 25; Forward PE: 13
Estimate Trend: Flat
Ransom Note Trendline: Buy Bank of America
Stock number two: JP Morgan Chase
The end of the mortgage party? Home lending plummets at Wells Fargo, J.P. Morgan Chase, - MarketWatch
The mortgage party is officially over.
Rising mortgage rates mean that fewer people are refinancing their homes, which bludgeoned fourth-quarter mortgage results at Wells Fargo & Co. WFC +0.42%and J.P. Morgan Chase & Co. JPM +0.40% , the country’s leading residential lenders, according to earnings reports released early Tuesday.
Note: Price to Book: 1.11
Trailing PE: 13; Forward PE: 10
Estimate Trend: Down
Ransom Note Trendline: Hold JP Morgan Chase
Stock number three: Wells Fargo
Wells Fargo’s Mortgage Business Sputters —Wall Street Journal
Wells Fargo, the largest mortgage lender in the U.S., saw profits for its mortgage lending division drop by 49% from the fourth quarter of 2012 to $1.6 billion. The bank’s home-lending originations totaled $50 billion, compared with the $125 billion a year earlier and $80 billion in the previous quarter.
Note: Price to Book: 1.57
Trailing PE: 12; Forward PE: 11
Estimate Trend: Up
Ransom Note Trendline: Avoid Wells Fargo