Description: This passage focuses on the suntrust login. Jim Cramer and his research associate Nicole Urken look at why the regional bank is a buy. SunTrust Bank is a purpose-driven company dedicated to lighting the way to financial well-being for the people, businesses and communities it serves.
I’m Nicole Eric, the research associate for Jim Cramer. We’re bringing you behind the scenes for Mad Money talking about banks. Now regional banks have been one of the key themes. Last night on the show we recommended SunTrust ahead of a big catalyst next week.
We are SunTrust for Action Alerts plus daikon, we sold it because we feared that it had reached the level that was too far and then pulled back, one of the few that are dams down two bucks was hiding out down dog but the reason why I have SunTrust is that it was a shocker when it didn’t pass last time.
When you look at the regional banks, there is hostage to housing, the thing that has always amazed me was that Atlanta was almost as hard-hit as Florida which is very strong now as Arizona as Nevada and California, what people didn’t realize is that this is a cyclical thing.
Their housing markets have gotten bad, now the housing market is catching fire in a bunch of states in the south but this one is emblematic, they’re going to be loaning again, at the same time they can return capital, that’s what I’m looking for from banks.
I need a bank which grows and can return capital, SunTrust denied the chance to return capital, now it has the edge, if they pass jumping on and turning capital, if they get a good approval next week, the CCAR is on March 14th, they will be able to potentially buy back about 5% of their shares.
They boost their dividend to 20% of payout which brings it to a 2% of it in yield, it is a very attractive level versus the Treasuries for example which have not done anything, SunTrust was the coca-cola bank which used to own a huge amount of coca-cola.
They stumbled beyond what anyone ever thought they could, because it was always one of the most conservative institutions, you get this idea that I talked about with David Faber and Karl today, you get a bank that used to be great became bad, then it gets great again.
A lot of the people who used to own SunTrust will come back to it, they want to find a new name city today, people at home may not recognize a hedge fund manager or institution, Sun Trust is new, that’s going to be something wrong, you have to get in ahead of this.
With the S&P up 8% year-to-date, even after the little bit of incremental Sun trust runs only up 2%, this is interesting, a lot of people look at that, that’s Doug other than the gold stocks which don’t work but that stock is up so much less than the market, I can still buy it, because people are always trying to justify at these levels.
There should be profit taking here, you shouldn’t outweigh but people are always looking and thinking they can mentally justify that, SunTrust is the most mentally justifiable bank, the bottom line is that SunTrust regional banking theme up less than the S&P year-to-date ahead of the catalyst March 14th CCAR is what you need to buy.