We are buying 75 shares of Bank of New York at roughly $150. Following the trade, Jim Cramer's Charitable Trust will own 750 shares of BNY, increasing its weight in the portfolio to 2.85% from about 2.56%. Today's purchase allows us to increase our position size while lowering our average cost basis. The trust bank reported better-than-expected earnings two weeks ago, helping end a slide that began in September and continued into October. The results reinforced our thesis that the bank will continue to deliver positive operating leverage, with revenue growing faster than expenses. BNY shares have rebounded since earnings but are still down about 10% from their September closing high of $164.84. We picked up some shares at roughly $138 on Oct. 15, the morning the bank reported, and we're nibbling again to build out the position. The stock's valuation is attractive here, trading at an undemanding price-to-earnings multiple of just 14.4x when looking out to 2027 numbers, according to FactSet. The stock can move higher as BNY wins more client business, driving stronger earnings growth, while a higher…
We’re adding to our position in a rebounding bank stock
In short
The trust acquired 75 shares of Bank of New York at roughly $150 each, bringing its total position to 750 shares and boosting portfolio weighting to 2.85%. This buy follows an earlier purchase at around $138 on October 15, successfully lowering the trust's overall cost basis. Although the stock has recovered from October lows, it still trades about 10% under its September peak of $164.84. Portfolio managers see attractive upside as the bank trades at 14.4 times projected 2027 earnings based on FactSet consensus.
Key points
- Growing fee-based revenue offers potential to drive future price-to-earnings multiple exp…: Growing fee-based revenue offers potential to drive future price-to-earnings multiple expansion for the bank.
- Better-than-expected earnings confirmed the bank's ability to maintain positive operating…: Better-than-expected earnings confirmed the bank's ability to maintain positive operating leverage by outgrowing its expenses.
- The trust successfully reduced its average cost basis across consecutive purchases in Oct…: The trust successfully reduced its average cost basis across consecutive purchases in October.