Don't let it get away!
Help yourself with the Fool's FREE and easy new watchlist service today.
Stocks made gains today, as the market digested nonfarm payrolls data, which indicated that the unemployment rate fell to 7.7% last month -- its lowest level since December 2008. The Dow (DJINDICES: ^DJI ) and the broader S&P 500 (SNPINDEX: ^GSPC ) were up 0.6% and 0.3%, respectively.
Financials were the second-best performing sector in the S&P 500, with a daily gain of 0.78% (just behind Materials, at 0.83%.) In fact, Financials are the best-performing sector measured month-to-date, quarter-to-date, and year-to-date.
The micro view: The two best-performing Dow stocks today were the big banks, JPMorgan Chase (NYSE: JPM ) and Bank of America (NYSE: BAC ) , up 2.6% and 1.7%, respectively. Their closest competitor, and the only other universal bank, Citigroup (NYSE: C ) , also outperformed today, with a 1.7% gain. Those numbers make my Wednesday column, These Two Stocks Could Lead the Market Higher, look prescient. Let me be absolutely straight with you here: I was not trying to time the market when I wrote that piece, and I had no idea this group would outperform today. This is what I wrote on Wednesday:
Even after today's pop, JPMorgan is the only among the three that trades at a premium to its tangible book value. BofA and Citi trade at rather remarkable discounts -- 21% and 31%, respectively. That suggests the potential for further gains is far from exhausted.
While I don't know how these shares will perform on any given day, I continue to believe that all three have the potential to outperform the broad market over the next three to five years. Of the three, the one I like best is B of A, and it appears I'm not alone. Last month, value-oriented fund manager Bill Nygren, who owns Bank of America in his Oakmark and Oakmak Select funds, explained to Morningstar why the bank could generate double-digit earnings growth even in the absence of any loan growth.
To find out why the Motley Fool's own Anand Chokkavelu recently wrote of B of A shares that, "today's prices are attractive and could result in a double or triple over the next five years," click here to request his premium report, which includes a full year of ongoing updates.