US Bancorp (NYSE:USB)

CAPS Rating: 4 out of 5

One of the largest bank holding companies in the country, U.S. Bancorp is the parent of U.S. Bank, a U.S. bank.


Player Avatar Alzo10 (97.61) Submitted: 7/30/2008 10:48:09 AM : Outperform Start Price: $26.87 USB Score: -4.56

The financials, and more specifically, the depositories, will lead the next bull run. Once the writedowns and huge reserving ends, these companies should see rocketing EPS. I think this will happen in the next 6 - 9 months.

Additionally, those banks that both have and have access to capital, can put it to work in a good environment right now. The yield curve is no longer inverted and credit spreads are at historic highs,. This translates into earnings for those banks that are putting money to work. Add to that the potential of buying assets (and whole banks) for pennies on the dollar, and this could be the ideal setup for a strong depository for a nice 4 - 6 year run.

I may have missed the recent rally by a week, but I don't think I need to time this stock. USB has always been on the more conservative side (a la my other favortie, WFC), and therefore should be one of the leaders coming out of this mess.

Bottom line, four years from now, USB will be higher, and it will outperfrom the S&P.

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