Each week, Industry Focus: Financials host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss a stock they're watching. In this segment, Frankel tells listeners why he's interested in Bank of America (NYSE:BAC) despite the recent plunge in the sector, and Moser talks about an insurer he likes.
A full transcript follows the video.
This video was recorded on March 25, 2019.
Jason Moser: I was going to ask you, what's the next action here for investors? What should investors take away from all of this? But, you know what, I have an idea that maybe your advice here is going to lead into your one to watch this week. I'm going to go ahead and ask you now, as we go into giving our listeners One to Watch for the coming week, what is your one to watch?
Matt Frankel: I am looking at my favorite big-bank stock, Bank of America. It's been a staple of my portfolio for a long time. I've really just been waiting for a chance to add more because it's been doing so well over the past couple of years. This little [dip] -- like I said, a little over 10% over the past week -- has given me a reason to look at it again. I think, yes, the Fed statement does give us a little bit of caution; I don't think the bank is worth 10% less than it was a week ago. I think the selling has been a little overdone, and that one's on my radar, especially if it continues to go down.
Moser: Yeah. I noticed a question on our Industry Focus Twitter feed about banks feeling the pinch. Really, it's not any one bank. The sector on the whole, after this news came out, it's been a little bit of a tough go about it. But as we've talked about on shows before, higher interest rate environments mean these banks can make a little bit more money. When interest rates are staying pat, that means we're going to prolong that path to more profitability. So, it makes sense, but given the way we invest here, I like that call. I like your long-term thinking there.
I am going to go with Markel (NYSE:MKL). We talk about Markel every so often on the show here, the insurer. Every time I see Markel creeping back, I wonder if I shouldn't add a few shares. But a couple of things I think worth noting. Their shareholder letter came out recently. We'll tweet a link out to that on the Twitter feed because I really do think investors all would benefit from reading their shareholder letter. It's a good read for a lot of reasons. But I think there's a segment in there this year on insurance-linked securities that's a really good one. It gives, I think, investors in the company a better understanding of what they are and why Markel is entering that market. Also, you read that letter, and I tell you, you walk out feeling really good being an owner of those shares. Truly one of those companies I hope to still hold 20 years from now.