Stockchase Opinions

Darren Sissons Deutsche Bank AG DB-N DON'T BUY Feb 22, 2019

This has been a train wreck -- there are better companies out there. They continue to see problems come forward. The only way to see a recovery is if interest rates go up -- something he does not expect soon.
$8.650

Stock price when the opinion was issued

banks
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DON'T BUY
A Merger with another bank? He stayed way because he does not like their lines of business. Merging both balance sheets leaves him at a loss. He does not see how it helps them except perhaps to close branches and lay people off. Germany is a massively over-banked market.
BUY
Barclays vs. Deutsche Bank He prefers Deutsche Bank, because it trades at a much lower valuation. Both trade at a fraction of their book value. Deutsche Bank has turned a corner with cost-cutting, though Barclays pays a better dividend. He likes European banks because they've been so beaten down and are trading at a fraction of valuation of the US banks. This is a pivotal year for Deutsche Bank and it should enjoy a big earnings bump.
PAST TOP PICK
(A Top Pick Jun 29/18, Down 32%) The flat yield curve, along with a riskier play resulted in this holding being stopped out. A collapse of a proposed merger also hurt them.
DON'T BUY
Among the worst banks in Europe. Trying to cut costs since 7 years, but still losing market share. Reduced dividends again. They don't know what they're doing. Want quality companies with free cashflow.
DON'T BUY
The UK banking system, especially in Germany, has not required big banks to clean up their balance sheets like within the US. He would not put more money into this region. He would stay away.
DON'T BUY
DB vs. CS CS is the worse performing one because they lent 5B to the hedge fund that lost 20B in two days, written off. European banks are not that attractive. DB has some strong sells. All are slow growth, unattractive valuations. Prefers Canadian banks.
DON'T BUY
Believes banks exposed to North America will benefit positively from rising interest rates. Revolving door with management, and host of other problems has created problems for company. Recommends giving stock some time to recover, but don't buy more.
COMMENT
options Put-buying today of 20,000 of the July 9 puts for about 30 cents. That's interesting because they own the June 10 puts, made money, sold them and rolled to July 9. The stock was trading at $9.60 at the time.
HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

DB has fallen 94% since just before 2008 and on paper, this is a very similar pattern to CS. DB is down ~6% today and its Credit Default Swaps (CDS) have been moving substantially higher today, indicating that investors are paying up for insurance in the event that DB fails or defaults. At times, these events can become a self-fulfilling prophecy, and a material decline in its share price can lead to fewer funding options and a worse liquidity picture for the company. The Fed and other central banks around the world established open swap lines the other weekend so that in the event of depositors withdrawing funds from a foreign bank, that foreign bank can call upon the Fed and receive par for US Treasury Bills, even if they are well below par on the market. This was not established when CS failed, and we feel that this might help to alleviate any issues with DB.  

Overall, as we've learned, these events can happen fast, and we're not ruling out the possibility of DB failing, but everyone, including the Fed and the US Treasury are keeping a closer eye on these possibilities and we think that higher level of scrutiny should help to quickly respond to any weaknesses in the bank.  
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PARTIAL BUY

Never got its legs again since glory days of 2007. Recent chart action suggests stock wants to come back to around $13 level. Long term, might have big upside. Constantly reinventing itself. Not the best name, but worst is over. You could take a chance. Buy part now, rest after election.