3 Incredibly Cheap Financial Stocks to Buy Now
If you've been steering clear of financial stocks lately, that's certainly an understandable decision. Just as last year's rising interest rates made lending a more profitable business, the interest rate cuts expected later this year could re-crimp lending's profitability. Loan delinquencies are on the rise as well. Both work against companies in the money business, as does the occasional lingering hint of economic lethargy. The relatively poor performance of most financial stocks since early last year suggests investors see this sector's unique risks.
In a few too many cases, though, the sellers have overshot their target. That is to say that several financial stocks have become oddly cheap within the past few months, pricing in far more worry than is merited. If you can stomach the volatility they're sure to continue dishing out for the foreseeable future, three of these names may be worth taking a shot on here.
Ally Financial (NYSE: ALLY) is an online-only bank. Don't let its lack of a brick-and-mortar presence fool you, though. The company offers all the services you'd expect from any traditional bank, including checking and savings accounts, credit cards, investing, and a wide array of loans. The bulk of its bottom line, however, is lending, and car loans in particular. Not counting corporate-level write-downs, more than 80% of last year's pre-tax income came from the automobile industry, with more than two-thirds of it being driven by auto financing alone.
Source Fool.com
