Summary: OVERPRICED
Score: 8/20
MOS: 5%
Share Price: $98
Sticker Price: $103
Banks make money in three ways…
1. Interest on loans
2. Interchange (credit card related fees)
3. Banking fees
There may be other products and services that banks offer to customers, but the three services listed above are the primary revenue generators.
The problem for banks at the moment are low interests rates. The lower the interest rates, the less money banks will make.
Low interests rates are great for consumers like you and I. For example, a lot of people have been refinancing their homes this year to save money on low interest rates.
From an investment standpoint, some people are saying bank stocks are ON SALE. Well, when you take a closer look in Tykr, that’s not exactly true. You can see that JPMorgan is on sale by 5% but Tykr won’t classify a stock as truly ON SALE unless the stock is 50% OFF.
I’ll keep my eye on bank stocks but I won’t be making any moves.