Just because you're bearish doesn't mean you have to sit and stew while waiting for this rally to play itself out. If you're mentally and fiscally nimble enough to entertain conflicting thoughts simultaneously you can both despise the market overall and stay long certain stocks, just to hold you over between now and the economic apocalypse.
Such is more or less the strategy of LandColt Trading managing director Todd Schoenberger, a man looking for a 35% drop in 2012 yet able to think of 4 stocks he loves now.
During the last couple months Schoenberger says we've seen great price action in bulge bracket banks. It's a trend Schoenberger would rather watch from the sidelines in favor of the Regional banks, that is to say those banks which are the closest approximation to what used to be called your local bank.
Cullin/Frost Bankers (CFR) is the trader's first pick. His enthusiasm is based in large part of the company's devotion to staying in its home state of Texas. While that seems quaint, if not foolish, in this day of mega-banks Schoenberger says it works to CFR's advantage in two ways. First, the company knows its product and area. Second it takes advantage of Texas' rapid growth, estimated at a million a year for the next 5 years.
If that doesn't sell you, note CFR's 3% dividend, "paying you to wait."
M&T Bank Corp (MTB) is next on Schoenberger's Regional Bank shopping list. The Buffalo based bank just purchased 300,000 mortages from Wells Fargo (WFC) (itself an amalgamation of regional mergers). Noticing my wince at the idea of MTB gathering what Wells Fargo spills Schoenberger is quick to point out Wells' ability to produce solid results, at least partially as a result of smarter than average mortgage portfolio building during the crisis.
Schoenberger infers the transaction of these mortgages was a deal that "helped Wells Fargo and helped M&T as well" in giving them a one-stop addition of customers up and down the East Coast.
Stepping away from the Regional fray, Schoenberger moves two a couple favorites from his last visit to Breakout: Family Dollar (FDO) and Public Storage (PSA). The first enjoyed a huge run in 2011, driven in large part by FDO's ability to take share from Big Box kinds Target (TGT) and Wal-Mart (WMT). In Public Storage Todd sees a best of breed storage company providing climate-controlled environments smaller competitors have a hard time matching.
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