Stock Investor Insights: Three Personal Finance Stocks to Buy Before Rate Cuts

You are receiving this email because you signed up to receive our free e-letters, or you purchased a product or service from its publisher, Eagle Financial Publications. Three Personal Finance Stocks to Buy Before Rate Cuts 08/20/2024 [Sponsored Content [8 Years. 800 Trades. 779 Winners. Want In?](]( Our top trading expert, Jim Fink, has developed a system that's produced 43,509% total profits - in eight years. Including a current win streak where he's delivered 712 winners. Without a single loss. Thousands of regular investors are already using his program to stuff their portfolios full of cash. [Learn how to join them here.]( [Click Here...]( Three personal finance stocks to buy before rate cuts signaled by Federal Reserve Chairman Jerome Powell offer enticing upside. Interest rate reductions traditionally widen the spread between what financial institutions pay to collect deposits compared to the amount they amass in revenues. That situation is unfolding for investors who are open to tapping into rising potential of personal finance stocks “Personal finance companies and financial service companies in general strengthened their balance sheets and broadened their income sources since the financial crisis, said Bob Carlson, a former pension fund chairman who heads the [Retirement Watch]( investment newsletter and his proprietary [IRA Calculator](. They should deliver solid cash flow and profits in most economic environments, and their income is likely to increase as interest rates fall. Bob Carlson, head of [Retirement Watch]( talks to Paul Dykewicz. Three Personal Finance Stocks to Buy: American Express (AXP) New York-based American Express (NYSE: AXP) provides consumers and businesses with charge and credit card payment products. It also operates a profitable merchant payment network. Its three key business segments since 2018 have encompassed global consumer services, commercial services and merchant and network services. BofA rates the stock a buy and is giving it a price target of $263, based on a 17.5x multiple to the investment firm's 2025 earnings per share (EPS) forecast. That PE multiple is on the higher end of the historical range (12-18x) for AXP, which BofA wrote was "appropriate," given the growth outlook and solid operating momentum American Express was achieving. Risks to meeting BofA’s price objective for American Express include weaker-than-expected macroeconomic conditions, softer consumer and business spending, slowed loan growth, rising competition, weakening U.S. consumer credit performance, disruptions in capital markets or an increasing regulatory burden. [Five Star Trader]( is an advisory success that successfully recommended two financial management stocks that produced impressive profits with modest holding times. They are PJP Partners (NYSE: PJP) andWisdom Tree (NYSE: WT). PJP produce a 17% gain in the stock and a 284% jump in the call options recommended by Mark Skousen, PhD, and Jim Woods. WT generated a 16% profit on the stock and 151% rise in the related call options. Ben Franklin scion Mark Skousen, who heads [Five Star Trader]( and Forecasts & Strategies, talks to Paul Dykewicz. Skousen also produced a profitable trade in San Francisco-based Visa (NYSE: V) in July 2023. However, that credit card company no longer is rated a buy by BofA. It now is listed as "neutral." [[The REVOLT against electric vehicles has begun (here’s how to play it)]( You may not have heard much about this in the Green Media… But America appears to be quietly initiating a global uprising against EV mandates and coerced adoption — one that could soon turn the auto business on its ear. The upside: There are [10 specific money moves]( we believe investors should make immediately to capitalize on this historic situation… To find out how to get full details on them — without permanent cost or obligation — [click here.]( [Click Here...]( Three Personal Finance Stocks to Buy: Bread Financial Holdings Inc. (BFH) Bread Financial Holdings Inc., of Columbus, Ohio, is a private-label credit card services provider that recently gained a buy recommendation from BofA to upgrade its rating from "neutral." BFH received a $54 price objective from BofA, based on a 1.1x multiple to current book value. That valuation is roughly in line with its peer average due to similar growth potential, BofA added. Investors are looking at BFH through a book value lens, given potential profitability challenges if the Consumer Financial Protection Bureau’s late fee rule limitation comes into effect, BofA wrote. BFH also faces risks similar to those of American Express in meeting its price objective. “We upgrade private label card issuers Synchrony (SYF) and Bread Financial (BFH) to Buy from Neutral,” BofA wrote in a recent research note. “We expect credit performance to improve prospectively driven by fundamental and seasonal factors. Continued delays in the Consumer Financial Protection Bureau (CFPB)’s late fee rule will give the companies time to put in place pricing and policy changes -- and provide near-term upside for investors.” Three Personal Finance Stocks to Buy: Synchrony (SYF) Synchrony's $54 price objective is based on a 8x P/E multiple on 2025 estimated EPS. The multiple is within the typical trading range for SYF of 6-12x, which the investment firm regards as appropriate given the relatively uncertain macro backdrop, and concerns about a potential late fee ruling, partly balanced by the potential for high capital returns and improving credit loss trends. A chance for outperformance would come from consumer balance sheets continuing to hold strength and credit metrics staying strong, BofA wrote. Increased visibility in peak loss rates may shift investor sentiment, BofA added. Other pluses may come from the Federal Reserve achieving a soft landing, as well as outsized capital return, the investment firm wrote. [[#1 A.I. Software to Find What to Trade](]( With thousands of assets to choose from, filtering through these to find the most promising ones can be daunting. What if I told you there is a search engine like the one you love and trust, but designed for traders like you to search and dominate the markets by accessing the most timely and accurate information? If you’ve never traded with predictive analysis or leading indicators... If you feel like you don’t have the time (or knowledge) to properly conduct thorough research and analysis... [Come learn (for FREE) the #1 A.I. to find what to trade.]( [Click Here...]( Risk Exists If an Expected ‘Soft Landing’ Turns Rough BofA’s outlook is predicated on the labor markets staying supportive and allowing a soft landing. This is consistent with the base case forecast of BofA’s economists. “Given prolonged inflation and a slow-growth economy, we assume stable and gradual advances in loss rates over the next few quarters,” BofA wrote. “We also note reserve levels are already elevated and likely account for losses in higher unemployment scenarios than in consensus forecasts. That said, we acknowledge that if a hard landing or a job market deterioration occurs, it would likely lead to higher loss rates and pressure earnings, sentiment and valuations for BFH and SYF.” In combination, better credit and less late fee headwinds should drive earnings per share (EPS) upside and BofA is above consensus estimates for both BFH and SYF in 2025. With Synchrony and Bread trading at 7.5x and 6.7x 2025e EPS, respectively, vs. other card issuers at about 9.0-9.5x (Exhibit x), BofA forecasts nice “re-rating potential” as investors gain confidence in credit and earnings trends. The three consumer finance stocks to buy offer a chance to benefit from the planned rate cuts from the Federal Reserve. Investors who are looking for a way to take advantage of rate hikes now have three additional "buy" recommendations to consider. Sincerely, Paul Dykewicz, Editor [StockInvestor.com]( About Paul Dykewicz: Paul Dykewicz is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of [StockInvestor.com]( and [DividendInvestor.com]( a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul also is the author of an inspirational book, "[Holy Smokes! 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