July 20, 2009

Why is Comerica Incorporated in the ERRI?

Posted in economic indicator, economic recovery, ERRI, U.S. Economy tagged , , at 5:31 pm by realitytax

Comerica Incorporated (Comerica ~ CMA) is a financial services company operating a Finance Division as well as segments outside retail banking: Business Bank, and Wealth & Institutional Management. In other words, not just a retail regional bank concentrating solely on consumer lending, consumer deposit gathering, mortgage loan origination, etc. The Business Bank focuses on middle market, commercial real estate, national dealer services, and international finance, as well as leasing, and technology and life sciences. The Wealth & Institutional Management segment offers investment and fiduciary services, private banking, retirement services, and discount securities brokerage services.

In indexing banking sector recovery on the heels of major intervention in the largest U.S. banks by the government it is difficult to ignore that Large-Cap institutions are influenced by TARP processes – it’s impossible to measure what’s happening without considering these large institutions (although the government hasn’t opted to the help of CIT as it did BAC, for instance.) CMA seemed a good middle-of-the-road choice.

CMA, which has traded as high as $54 within the last year, was in disfavor with traders when it bottomed out in early March under $12/share. Stock price trends reflect “collective opinion” within the investment community. Both the 50 day and the 200 day Moving Average are falling. Other indicators are mixed – as is true for much of the sector.

The financial sector represents just under 10% of the ERRI equity component. With $3.4 billion in market capitalization, CMA, a Mid-Cap stock, is initially weighted as 3.32% of the whole (the financial sector comprises just slightly over 10%;) the rest of the financial sector is represented by AIB and Fifth Third Bank.

Disclaimer: Readers are advised that the ideas, materials, and opinions contained herein should be used solely for informational purposes. The author does not purport to tell or suggest investment securities that should be bought or sold. Investors should always conduct their own research and due diligence and obtain professional advice before making any investment decision.Neither the author nor realitytax shall be be liable for any loss or damage caused by a reader’s reliance on information obtained in any posts, newsletters, special reports, email correspondence, or comments on the web site. The author is not a registered investment advisor or broker/dealer.

The information contained herein does not constitute a representation by the publisher or a solicitation for the purchase (or sale) of securities. Opinions and analyses are based on sources believed to be reliable and are written in good faith, but no representation or warranty is made as to their accuracy or completeness, and we are not liable for errors or omissions. All such information should be independently verified with the companies mentioned.

The author(s) receives no compensation of any kind from any companies that may be mentioned on this web site. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed; the intent is neither to suggest investment choices/strategies nor to influence market conditions, but rather to divulge methodology for inclusion of equities and sectors in the Economic Recovery Reality Index [ERRI]


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