Marshall & Ilsley Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Milwaukee-based bank Marshall & Ilsley (NYSE: MI  ) were up nearly 13% in intraday trading as investors reacted to a bullish report from Goldman Sachs (NYSE: GS  ) on the financial sector.

So what: In its report, Goldman upgraded its rating on the entire financial sector to overweight, which was the first time it gave the battered sector that rating since the financial crisis. The analysts noted that a rising economic tide will lift the banks, as will increasing dividends -- which Goldman says will start to come after the second round of banking stress tests. Goldman itself was up 2.7% on the news, and fellow financials Morgan Stanley (NYSE: MS  ) , JPMorgan Chase (NYSE: JPM  ) , Citigroup (NYSE: C  ) , and Bank of America (NYSE: BAC  ) were also showing gains.

Now what: I think there are a lot of smart folks at Goldman Sachs, so I don't take their call on the financial sector lightly. However, one bank's report on financials does not alone make an investment case for any stock, let alone the struggling M&I. I happen to think that the market may have gotten overly pessimistic on M&I and it could provide a good risk/reward for investors. But investors need to dig in themselves and get comfortable with the bank's balance sheet and issues like its exposure to the troubled Arizona housing market -- not rely on a broad sector call from Goldman.

Want to keep up to date on Marshall & Ilsley? Add it to your watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.                                                                      

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his Motley Fool CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policyassures you no Wookiees were harmed in the making of this article.


Read/Post Comments (0) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1387466, ~/Articles/ArticleHandler.aspx, 7/26/2014 9:24:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement