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Company Research
MAER Best Ideas
MAER (The Monitor of Analyst Earnings Revisions) is Mill Street’s long-standing multi-factor quantitative stock selection model and graphical tool. It uses proprietary indicators for earnings estimate revisions, price action and valuation to forecast intermediate-term relative returns for ~6500 stocks globally. With Q3 earnings reports in full swing, the latest monthly MAER updates for the Russell 1000 universe show ~60% of the universe is maintaining positive revisions trends, a relatively high proportion though off its recent peak. While Tech estimates remain quite strong, the sector has had a big move recently and the sector that stands out as a potential contrarian play is Financials, where estimates are still rising but relative returns have lagged lately, improving relative valuations. The list of highest-ranked stocks includes many Financials from multiple industries, including Morgan Stanley, BlackRock, US Bancorp and Chubb.
Edition: 224
- 14 November, 2025
Banks confront interest rates, regulators and credit entering earnings season
Financials
Bank stocks sold off on multi-decade highs in long term interest rates last week, while investors prepare for a host of key events over the coming months. Charles Peabody believes banks could rally on 3Q23 earnings results as investors see some relief from regulatory rulings and deposit betas while AOCI and credit deterioration remain front of mind. However, the fundamental trends for banks will continue to deteriorate into 1H24. Markets are differentiating between banks with the capital, liquidity and funding to take advantage of opportunities - and those without. Charles favours JPMorgan, Wells Fargo and PNC, while shunning US Bancorp and Truist Financial.
Edition: 171
- 13 October, 2023
Financials
USB is capital constrained and is hampered by an under-earning investment portfolio which will pressure earnings for years. Charles Peabody also questions management’s credibility - performance targets unveiled at Investor Days from 2013, 2016 and 2019 all went unmet. More recently, management has been disingenuous about its recent equity capital raise and deposit trends despite obvious balance sheet signs to the contrary. Statements about NII, stock buybacks, positive operating leverage and even the “3.8-year duration” on its AFS portfolio are all questionable. Charles downgrades the stock to Sell and expects the shares to revisit their 52-week lows.
Edition: 167
- 18 August, 2023
US Bancorp (USB) & Fifth Third Bancorp (FITB)
Financials
Possible M&A? Paragon’s JetTrack has been flagging some interesting flights between the two banks in recent months - this would be an acquisition that makes sense for USB and their acquisitive C-Suite. While more recent acquisitions have been focused in the Western US, CEO Cecere has stated that he would like to expand into the Southeast (where FITB has a large presence). Adding to the intrigue is the fact that USB flights have also been been tracked to Boston where multiple sizeable holders of both banks' stock are based.
Edition: 141
- 05 August, 2022
Growth vs Income Investing: Why choose?
Financials
As the investment world obsesses over “DeFi” and “FinTech”, old-fashioned Financials are cranking out record profits on historically conservative leverage ratios amidst one of the most hostile Net Interest Margins on record. These cheap bank stocks have become high-quality growth stocks. The weight of Financials in the S&P 500 is barely above the levels seen at the trough of the GFC; despite generating ~25% of overall index profits they only represent an 11% weight in the index. KCR's top ranked stocks in the sector include Fidelity National Financial, American Financial Group and US Bancorp.
Edition: 126
- 07 January, 2022
Financials
Takeover looming? Paragon’s JetTrack platform flags interesting flight activity from PNC to FITB’s HQ - PNC flew to Cincinnati on June 15, for the first time since December 13, 2019. It has flown back 5x since then. Following the recent US Bancorp deal, FITB is the last of the five largest regional banks by assets to receive significant acquisition interest in the past two years.
Edition: 123
- 12 November, 2021