Sell stock pick U.S. Bancorp as a source of cash for coming emerging market buys
06/19/2013 1:18 pm EST
Even if the Fed doesn’t take any overt action in the next few months to slow its $85 billion program of bond and mortgage-backed asset buying or to raise interest rates, I still think interest rates, especially mortgage interest rates, will continue to inch upwards. You could already see two effects of that in U.S. Bancorp’s first quarter earnings report. For the quarter that ended on March 31, mortgage originations fell by 3% from the fourth quarter of 2012. Net interest margins have been dropping across the banking sector in 2012 and so far into 2013, and although U.S. Bancorp has done a good job of defending its margins, it too has seen some erosion and I think that’s likely to continue. I’ve owned U.S. Bancorp very profitably (a 36.13% gain plus dividends) in my Jubak’s Picks portfolio http://jubakpicks.com/ since March 2010, but I think it’s time now to look for shares with more upside and where the headwinds are not quite so pronounced.
Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , I liquidated all my individual stock holdings and put the money into the fund. The fund did not own shares of any stock mentioned in this post as of the end of March. For a full list of the stocks in the fund as of the end of March see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/