What will you do if you know the stock you own is “fairly valued”? Sell! That’s what Meredith Whitney, bank analyst, recommended.
I owned Goldman Sachs (GS) shares and I still have some stock options on Goldman Sachs. I was planning to unload them just before Goldman Sachs’s earning announcement on October 15th. I am late by two days, Meredith slapped “neutral” rating on Goldman Sachs today and the stock fell by 2% to $186. I sold all my shares this morning and put tight stop in option positions.
Meredith Whitney said she now believes bank stocks are “at least fairly valued.” and downgraded Goldman Sachs from “buy” to “neutral”. Neutral is the nice way of saying “Sell” in Wall Street.
Ms. Whitney, whose bearish calls on large bank stocks gained renown during the financial crisis that erupted last year, said in a note she is now “far less bullish” on banks than last quarter and urged clients “either to take profits or go neutral into the next two weeks.” She also lowered her earnings outlooks for Bank of America (BAC) and Citigroup (C). Panic set in now. Even the banking stocks like J. P. Morgan Chase (JPM) fell 1.8%.
If you own banking stocks and had decent profits in the recent run, you may want to unwind some positions to protect your profit. Major U.S. banks report earnings this week starting with J.P. Morgan Chase tomorrow. Goldman Sachs and Citigroup report on October 15th. Bank of America will announce earnings on October 16th.
Take your profits when you can!
Related Links: Goldman Sachs Downgrade | Caution: Banking Stocks Ahead
Disclaimer: I own stock options in Goldman Sachs.
