Aug 3, 2015|
Stock Talk - Scott Gamm (The Street, BAC, VLO) 8.3.15 by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Our guest is Scott McGann from thestreet.com. And we're going to be talking to about three stocks including Bank of America. Are you a buyer Horry seller of Bank of America Scott. Well look and he certainly need to factor and that's Federal Reserve looming rate hike when it comes to the banking sector are. And what we're seeing is that you know as a great surprise in the bank's net interest margin you know. Should there well. Those margins again and it Tyrell rates so that you really need to keep that in mind we've had of course unprecedented. But interest rates over the past you know six and a half skiers near 0% and if that is likely to change. Some are still expected that to affect patent and during its September meeting Robert looking at December of this from economists we talked we even say it's. In 2016. But regardless but that is looking to exit the economy and the banking sector in terms of the analysts we speak to should farewell. What do you think about the potential for break ups of the bank like this JPMorgan. Is under pressure mean your just such a large financial institutions now. I don't know that they can be managed by one person. Well look I mean this is certainly controversial issue of course beat just had besides your anniversary of the Dodd-Frank legislation which of course. Tried to mitigate the risk of these colts so called systemically important financial institutions. And you can argue whether or not that. What did that of course we'll have the vocal which tried to limit certain parts of proprietary trading so. You know you have to ultimately look at each bank and say OK well you know it's a breakup it's impossible of course these banks are gonna type that it had. All right how about Valero Energy PLO is the symbol to 65 dollar stock. With tremendous exposure to oil prices. Well look so the thing with the there'll PLO and marathon petroleum and PC Peter refineries so. We're looking at now are seen west Texas intermediate that's the price for US soil about 46 dollars a barrel for seeing current crew which is the price war. Overseas oil that's sifted out of the about a four hour spread there are so. Any time we think that's spread widened that's going to be good for the refineries because that gives them an edge from their overseas competitors they can actually. Tapped into the cheaper US soil which is not up for export. But I find that oil and then export that overseas first overseas refineries have to happen to get more expensive Brent crude so. That's why the annals of the speak to like be refining stocks at least right now. Because of course we're seeing that spread wide in a little. You know they look pretty attractive from a pricing standpoint to weigh in lake when you look at their earnings that I guess the question is can they. Deliver the EE in that price to earnings ratio. Well certainly you know cause he didn't continue to keep an eye. On oil prices but when you look at some of the bigger integrated oil companies mean those companies really there's no there's not much. Other solutions for them when it comes to low oil prices it's really tough for them to others it's pretty black white and accents they're gonna have to cook cost. As a way that he'd improved margins currencies refineries they can actually. Get by giving this to spread actually of course. You know cheap oil is good for them because they used to recruit deterrent gasoline. YE ND somebody's making money on that trait I mean oil's traded 46 dollars a barrel but I'm still pain to 69 per gallon gas. We're totally according to my math I should be paying about 229 for gas but they're sure prices are sure sticky on the way down at the key there aren't they Scott. Yeah I mean look you know that didn't happen all the time yes gas prices are a dollar cheaper than they were a year ago. But of course oil prices at least cruise is in a 50% cheaper. That are or so. But you know keep them under our cost to refine. That crude he can't recruit your car. Right that's that's true and it's that's very true thank you very much for your time Scott we aren't yeah are much. His three stocks elections were Bank of America. Valero and marathon symbols BAC. BL OO in and PC check with the your broker check with your advisor before you buy those stocks or any others that we might talk about during the course of our program.