Tags: Bove | Bank | Stocks | Cheap

Dick Bove: Bank Stocks Are ‘Dirt Cheap’

Tuesday, 28 Feb 2012 02:22 PM

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Banking stocks have sunk so low they've become cheap but a shift in society's view of banks makes them "dirt cheap," meaning they'll climb higher as the government eases up on regulations, says famed banking analyst Dick Bove, of Rochdale Securities.

Bove has argued that poor perception of banks harbored by the government and individuals has kept share prices too low.

"What we're looking at is the complete change in attitude towards this industry from what it's been over the past three years," Bove tells CNBC. "What has killed this industry over the last three years has been the negative psychology. It's not negative any longer."

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

Word is catching on. Bank stocks on the S&P 500 broad equities index are up 13.5 percent this year.

Bove adds he believes the government will ease certain measures in the Dodd-Frank law, and adds that many banks' cash positions that exceed their market capitalizations, suggesting they are very undervalued.

Calls are rising for regulators to scrap bans on proprietary trading, which allows banks to invest in capital markets often in a risky fashion that fuels volatility with their own funds.

Such a ban is outlined in the so-called Volcker Rule, a list of reforms championed by former Fed Chairman Paul Volcker.

"There is a considerable risk that as proposed, the regulatory infrastructure to implement the Volcker rule could unduly impede the competitiveness ... of our financial markets and hinder the flow of capital," Republican SEC Commissioner Troy Paredes said in a recent speech, Reuters reports.

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

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