Saturday, August 2, 2008

SunTrust Banks: The next "annointed" one

Put your trust in the "son" is intoned from the pulpit; on the church at Wall Street and Broad next week you will be "intoned" to put your trust in the "sun."

So being ecumenical, I'll give you the sermon on Saturday!

We know that Bank of America, JP Morgan, Citigroup, Wachovia, Wells Fargo and US Bancorp are blessed by the Fed. If you had any doubt, look at their prices from the July 15 low, to the close yesterday.

BAC 18.44 to 33.33
JPM 29.24 to 40.76
C 14.01 to 18.87
WB 7.80 to 18.98
WFC 20.46 to 30.50
USB 20.57 to 30.80

The bank that most people missed on the list is SunTrust Bank(STI 42.01) the 10th largest bank in the US, with a wonderful footprint in the South, that JP Morgan would love to covet.

Look at the action in SunTrust. Shorts have been spreading rumors about dividend cuts that didn't happen, capital raises that weren't needed, and earnings blow-ups that never materialized. The stock was knocked from 60 just a quarter ago.

But what most people missed is that this bank has been "blessed" by Father Fed, and Wall Street will "get it" next week.

I talked about this number on July 17 at 31.83. SunTrust never should of traded to the levels that it did. It's franchise value is considerably above the current price.

Now Friday, First Priority Bank of Bradenton, was closed by the Feds and SunTrust acquired the insured assets in a riskless transaction in a purchase and assumption agreement. STI gets new clients in new markets, and the blessing of the Fed.

How then, as the 30 million shares of shorts allege, can SunTrust be in trouble, if it has been given the imprimatur by the Fed's?

That's Wall Street's sermon on banks, of which you've gotten today, of which you'll hear about next week.

The "Sun" has been given the blessing by the "Father." And there will be converts on "the street."

It's the next annointed one!

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