Trade Alert – Equity And ETF Models
This morning, we added one-half percent of the portfolio to Truist Financial (TFC) and PNC Bank (PNC) in the equity model and initiated a 2% of the portfolio position to the SPDR S&P Bank Index ETF (KBE) to the sector model.
As shown below, many regionals are breaking out of bullish inverse head and shoulders patterns. Further, we were waiting on earnings to get more comfortable with PNC and TFC before adding. In both cases, as is the case with most regionals, earnings were OK. Margins are shrinking, and loss reserves are rising, but deposits are only falling slightly. They have weathered the storm and remain very cheap versus the market and larger banks. It also helps that TFC has a dividend yield of over 6%, and PNC is over 4%.
Equity Model
- Add 0.5% of the portfolio to Truist Financial (TFC)
- Increase PNC Bank (PNC) by 0.5% of the portfolio.
ETF Model
- Initiate a 2% of the portfolio position in the SPDR S&P Bank Index (KRB)
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Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube
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