ETrade Financial Corp. (ETFC)

It is not a cheap stock but is a proxy upon the return of the retail investor. Competitors will allow 24 hour trades in ETFs. ETFs with companies in other countries could still trade after hours actively.

This looks very nice from a technical perspective. We are seeing some nice movement in the stock. It’s trading at about 17X earnings on a forward basis, so is not particularly expensive. As long as we continue to see markets perform decently, with volumes continuing to grow, we'll see the stock move higher. 2018-2019 earnings are incrementally moving higher, but a lot really depends on volume in trading. Right now, we are seeing lots of things moving around such as Bitcoins, crypto currencies and marijuana stocks. If, and when that starts to calm down, you have to look at stocks again to see how sturdy they are to other names.

(A Top Pick Jul 7/17, Up 37%) He is going to roll this to Top Picks again. New management came in and they took a lot of mortgage risk. They wound that down so it is a non-issue now. That was the prohibitive factor for a take-out. They are now very cash generative and are buying back shares.

A 25 basis point hike raises revenue $60 Million for the year. Every little incremental hike makes a big difference. It is 10% accretive to earnings. (Analysts’ target: $58.00).

He likes the market. There are no recession risks on the horizon. Expects the Fed is going to be prudent and cautious. He knows we are going to have stable to higher rates with the Fed. This is all good for something like an E*TRADE. Feels they have a lot of structural tailwinds going for them now. They've cleaned up the portfolio and have nice interest rate sensitivity. The group as a whole makes a lot of sense. (Analysts' price target is $49.00.)

Chart shows a nice upward trend from 2013, and it is quite above the trend line, which is a potential for a downside move. However, given that it is in the right space, where investors are coming back to the market, you probably could buy this. He would recommend you look at much more short term. Look at it in the next 5-6 months to see how it is behaving.

(A Top Pick May 3/17, Up 23%) He was looking to a breakout of the stock. It still has lots and lots of upside. It was underappreciated but now has a lot of room to go. You could get pullbacks in the next couple of weeks and then you could buy more.

It has lots of upside. You want to own stocks for the winter. If there was a 3-5% pullback, then this one would do so and it would be a great time to buy it.

Everyone thinks this is all trading commissions, but it is actually a fantastic rate play. Management has been very clear that they are guiding for a 270-basis point on net interest margins as a lender. On every 25-basis point hike, they are capturing 75%-85% of that, and are able to flow that right through. As a backup plan, volumes are going higher. (Analysts’ price target is $48.)

He wants to benefit from both a long-term bull market in equities and rates going slowly higher over the next number of years. This is one of the first discount brokers. It has a very strong brand in the US. Because the US investor is becoming re-engaged, their growth rate has really picked up over the last year. They’ve grown their brokerage account by 5.7% and trading revenues are up 27% so far this year. They have $50 billion in daily deposits, and as rates go higher, make a higher and higher profit margin on that. This is a consolidating industry, and this company could be a target. (Analysts’ price target is $45.)

(A Top Pick Feb 8/17. Up 16.48%.) They have a fantastic stream of commercials on right now. The propensity for people to move back online and trade has really increased.

This just put in a share buyback, close to 10% of the market cap, and needs to be completed before February 2018. There is tax reform and this is a 38% high tax bracket payer, and for the go forward earnings, this is a good thing.

One of the best names exposed to the short end of the curve for a rising rate cycle. They have estimated about a 2.5% net interest margin this year. Management has said that for every 25 basis points the Fed hikes, they get about 10 more BPs through to that margin. There is fantastic leverage to the rising rate cycle. Also, they have a fantastic ad campaign going on right now. (Analysts’ price target is $41.)

(Top Pick May 3/17, Up 2%) He likes it. It trimmed off a little lately. The pullback was positive for it. It will likely move based on the technical and fundamental pictures. It is looks good for the next couple of months.

Fundamentals look okay on this stock. Starting in February, there was a bit of a short-term downtrend, and that seems to be broken. They reported pretty good earnings recently, which is the driver right now. He is looking at this as a trade, and thinks it might get back into the mid to high $30s. He is looking at this as a possible 10%-20% mover, and then he will be gone. (Analysts’ price target is $42.)