I featured Bank of New York Mellon (BK) in the Buy Low Opportunities Portfolio in the inaugural issue of Smart Investing in Turbulent Times.
Shortly thereafter, Wall Street’s consensus earnings estimates decreased for BK. Therefore, on October 12, I changed my rating on BK from buy to hold, writing, “the chart indicates that the stock appears poised for additional near-term capital gains.”
Then on October 26 I wrote, “The stock is actively climbing toward 45, at which point it will assuredly pull back and trade sideways, largely because there’s no earnings catalyst on the horizon to push it higher. I would put in a sell order at 44.50...”
Today, the stock reached 44.50. Therefore, I will sell BK from the Buy Low Opportunities Portfolio today, representing an approximate 11% total return in 31 days (including one dividend!).
While I absolutely believe that financial stocks are approaching a bullish time period in U.S. stock markets, BK is not the one I would own for that run-up, because it’s already fully-valued based on fundamental analysis. I will be ready to recommend an undervalued financial growth stock for you the moment one of them appears ripe for capital gains.
In the meantime, I will add one or two stocks to the Smart Investing portfolios next week on November 9 and 10.