Client Talking Points
It's easy to look at a major even that's occurred during a trading day and blame that for whatever direction the market decided to go. For instance, many people yesterday thought Harry Reid's comments sunk the market. But in reality, there's more going on behind the scenes. Growth continues to slow, earnings are under pressure and we face a political bubble that's quite unique in regards to the fiscal cliff. All these things (and many others we fail to mention here) all factor in to trading and markets. It's easy to pick a target and lay the blame on it, but it's pointless in ways.
|FIXED INCOME||18%||INTL CURRENCIES||18%|
Top Long Ideas
After a long downward slide, TCB has finally turned the corner. The margin has stabilized after the balance sheet restructuring. Loans are growing thanks to the equipment finance business. Non-interest income is more likely to go up than down going forward, a reversal from the past 18 months. Credit quality has a tailwind from a distressed housing recovery in TCB’s core markets: Minneapolis, Detroit and Chicago. On top of this, the CEO, Bill Cooper, is one of the oldest regional bank CEOs, which raises the probability that the bank will be sold. Expectations are bombed out at this point, so we think it’s time to move from bearish to bullish on TCB.
There is improving visibility on 20%+ EPS growth with P/E of only 11x with better content leading to market share gains. New orders from Canada and IL should be a catalyst. Additionally, many people in the investment community are out in Las Vegas at the annual slot show (G2E) and should hear upbeat presentations by management.
While political and reimbursement risk will remain near-term concerns, on the fundamental side we continue to expect accelerating outpatient growth alongside further strength in pricing as acuity improves thru 1Q13. Flu trends may provide an incremental benefit on the quarter and our expectation for a birth recovery should support patient surgery growth over the intermediate term. Supply costs should remain a source of topline & earnings upside going forward.
Three for the Road
TWEET OF THE DAY
“Wells notice to Stevie Cohen…imminent wrist slap" -@ZH_Crown
QUOTE OF THE DAY
“What we call 'Progress' is the exchange of one nuisance for another nuisance.” -Havelock Ellis
STAT OF THE DAY
GETCO offers to buy Knight Capital (KCG) for $3.50 a share.