When people say nothing is cheap in this market I am going to say "have you looked at the airlines? Have you looked at the banks?"
The airlines should not be one-day wonders. Delta (DAL) reported a remarkable set of figures and, believe it or not, it may be the one that is least liked, as nutty as that is. These companies are going to be returning capital as if there is no tomorrow.
You get the dollar to cooperate, you get the companies to all announce a similarly small capacity expansion and you will think, "what was I doing not owning stocks selling at 7x earnings with great balance sheets and tremendous prospects for year-over-year growth?"
The banks are a slightly harder call, because it is unlikely that they can trade much through where they were when we thought there would be four rate hikes. However, January and February were horrendous months, March was better and April's looking the same, so the idea that, like the airlines, it has to be a down year, is beginning to look like it is too pessimistic.
I think JPMorgan (JPM) gave you the best set of numbers but Citigroup (C) and Bank of America (BAC) may be more undervalued given their gigantic discounts to book and Wells Fargo (WFC), which, along with Bank of America, is an Action Alerts PLUS name, has become the most problematic because it can't really trade at a premium if it's not able to give you premium numbers.
Read Real Money chartist Bruce Kamich's updates on JPMorgan (JPM) and Wells Fargo (WFC).
I will be noodling more about these banks after I get a chance to see the transcript of Citi's call. But Wells Fargo's going to be questioned endlessly about its oil and gas exposure, and that's going to make it difficult for the stock to advance until either oil trades to $50 or we get two rate hikes... or both!
