Dear Reader,
Today's big news came out of the banking sector
But not in the nation, you were thinking.
While most investors are still looking for value in the banking sector, Warren Buffett emerged as a winner by announcing that he'd boosted his already big stakes in five Japanese trading houses. Those names are Itochu, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp., and Marubeni.
Finding value can be difficult for some investors. They aren't sure where to start. More importantly, they don't know how to properly value a company.
Today, we'll be talking about how you can identify value stocks and different readily available tools.
Wait for Their Terms
There are a handful of terms that I want you to know. But we'll start today with the easiest one.
Tangible book value (TBV).
This measurement offers us a deeper understanding of a company's net worth.
We calculate TBV by subtracting the company's liabilities from its tangible assets.
What are Tangible assets? These are things like real estate, equipment, and inventory.
Intangible assets include patents, trademarks, and goodwill. We don't consider these in TBV.
This is a very important tool in how we find good banks with Tim Melvin.
In addition, this can be a solid tool to help us identify stocks that may be deeply undervalued in the real estate, energy, and mining markets. We'll use TBV as a guide today in our live show. From there, we'll discuss a few other metrics. Then we'll use TBV in our Flashpoint Trader session at 1 pm ET, and see if we can find even deeper value selling puts on something trading below the sum of its parts. Finding value can be difficult, so let's be like Buffett and find real opportunity.
Today's Momentum Reading
WORLD'S BIGGEST INDICATORS
Broad Market: Yellow
S&P 500: Yellow
Recap: The World's Biggest Indicator (Momentum) is Yellow...
This is a rather fascinating market. Right now, you have traders cheering the March CPI number - but we ignore the fact that this figure included oil trading at $65 before OPEC's cut. I feel something coming... and I don't really like it.
What You Missed
The current banking crisis is putting the spotlight on critical audit matters, and both depositors and investors are quickly losing faith in banks of all sizes.
But even in these uncertain times, there's hope for investors who can strategize accordingly. For example, during a 17-day trading period in last year's decline of a major bank, investors saw the potential for gains as high as 625%. And when the bank stumbled again in April, there was another opportunity for a 300% increase.
This bank is none other than Credit Suisse, the once prestigious 150-year-old banking conglomerate. However, since the financial crisis, Credit Suisse has been shrinking and conducting numerous layoffs.
The bank has been caught up in several scandals, including pleading guilty to defrauding investors over an $850 million loan to Mozambique and issuing kickbacks to some of its bankers. In short, Credit Suisse is a prime example of a failing company, and savvy investors can exploit such companies for their own gains.
As Credit Suisse continues to fall, Shah Gilani has identified a list of other struggling banks that you need to be aware of immediately. Some of these names might even be hiding in your portfolio right now. To protect your investments, it's crucial to learn how to navigate this situation before the major banks begin reporting earnings this Friday.
To find out more about these "deadbeat" banks and how to capitalize on their downfall, click here.
Stay Liquid,
Garrett
The post Finding Value in Any Market appeared first on Midday Momentum.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.