This week 24/7 Wall St. is picking several stocks that are likely to double off of their lows.  The  time frame is by the end of 2010, which is meant to coincide with some form of economic recovery next year.  This is not based on a sharp turn up in the economy. A number of the credit and financial issues facing the markets will be in place for the near-term or longer.  The other assumption used for choosing the stock prices is a market bottom of 600 on the S&P 500 Index.

These are the financial stocks.

The five financial stocks that should double share similar characteristics and have been beaten down by the market based on perceptions that may change to their benefit in the next 60 days.

Shares in Citigroup (C) jumped when Vikram Pandi, the bank’s CEO, said that the firm was profitable in the first two months of 2009. Many experts said the statement does not mean much if Citi books huge write-downs of toxic assets or consumer and business credit defaults for the entire first quarter. Even after the improvement in the stock price after Pandit’s comments, Citi trades at only $1.50.

If Pandit’s statement holds true for all of Q1 2009 and the bank makes money and does not book any unexpected huge losses due to balance sheet impairments, Citigroup will at least double. Even at $3 it will still be well below its 52-week high of $27.35.

If Bank of America (BAC), JP Morgan (JPM), and Wells Fargo (WFC) can post Q1 results that also indicate that there light at the end of the tunnel, each of their stocks will run up sharply.

General Electric (GE) is also trading higher over the last week based on the notion that its financial services unit could be profitable for the first quarter. If it is, and the conglomerate’s large infrastructure business and NBCU post modest results, Wall St.’s perception of GE will turn positive as quickly as it turned negative. If GE guides for a profit for the  entire year in it financial  operations and moderately good numbers for the balance of its units, the stock could easily move back to $20. And, at that, it would still be only trade at half of its 52-week high.

Douglas A. McIntyre

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