BNP Paribas (BNP-FP)

The financial leverage is too high and there is declining production per share. He would not own this. There are better names with a lot less risk.

He likes this because of the global growth, and he really likes Europe and European banks right now. Rates are going up, but more importantly velocity of money and loans are finally happening in Europe, both to consumers and businesses. Europe has been a laggard out of the recession, and over the last 18 months have finally got their act together. Trading at 10 PE, has a growing dividend and he really likes France. Dividend yield of 4.1%. (Analysts' price target is €73.25.)

(A Top Pick Jan 24/14. Down 19.57%.) He was really early to this one. Luckily it wasn’t a big holding in a lot of his global funds. The big issue has been the problems that have been seen in Europe in the 2^nd half of 2014, such as Russia invading the Ukraine, concerns about deflation, etc.

European bank that is well-capitalized and have done a good job of shutting down assets and cleaning up the balance sheet. 60% of their operating profit comes from a very solid retail franchise that he thinks will support earnings. They ultimately should benefit from rising interest rates and increased capital markets activity. A good opportunity to get exposure to Europe which has turned the corner. You are starting to see more economic growth there. Yield of 2.65%.

(Top Pick Aug 28/13, Up 19%) High dividend yield. First to go from capital accumulation to capital distribution.

It is restructuring, return of capital and revaluation. It still sells below book value. 3.5% dividend, 4 next year and 5 the year after.

One of the strongest banks in France. If you are positive on the outlook for France it would be a good place to go. He has HSBC for this exposure plus two others.

A French bank on the Paris exchange. 60% of its business is retail. Biggest reason to own this is that it is one of the 1^st European banks to shift from capital appreciation to capital distribution. Capital levels of the business are fine so you’ll see dividends go up and up in the next few years and expects stock buybacks will also happen. Trading at about 0.7X Price to Book. Management’s goal is for ROE to get to 12% by the end of 2015. Yield of 3.1%.