Opinions
Jim Cramer - Mad Money
State Street Corp
STT-N
DON'T BUY
Sep 18, 2023
$71.275
Stock price when the opinion was issued
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DON'T BUY
One of the larger custodial banks and holds assets for pensions, profit sharing plans and mutual funds. The fee stream from this is probably very good and stable. Not sure the growth rate is very satisfactory to management, so started to get more aggressive and ended up hurting their reputation. Will have slow growth going forward.
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TOP PICK
TOP PICK
Financial services category, but in reality is a "custodian" of security transactions. Very stable business with lots of opportunity. Margins and profits continue to rise. Weakness after Silicon Valley collapse has created buying opportunity. Recent inclusion in US "Fed Test" indicated large amount of excess capital. Expecting large divided payout soon.
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They bought back 13.2% of shares this year. That's good, but STT lost market share to Blackrock in ETFs and that's not good. The lesson: big share buybacks doesn't alone mean a stock is a buy. The underlying business has to be sound too.