Thursday, November 10, 2005

Why are We So Bullish on Charles Schwab?

Shares of Schwab (SCH) hit yet another 52 week high this morning.

Peruse our archives -- we were pitching Schwab when all the Street could talk about was Goldman's great quarter.

At the risk of sounding like a broken record, we're issuing another strong buy rating.

SCH is a veritable turaround play.

After the seismic bubble burst, a customer exodus, and a poorly timed/executed aquisition spree -- Schwab stock (SCH) took a nosedive.

With the stock cratering below $10 a share, all eyes were on chief value destroyer Dave Pottruck.

When Schwab's board ousted Pottruck in the summer of 2004 and founder Charles Schwab took the helm (again), we couldn't help but sit up & take notice.

In September, a full year after Pottruck's ouster, we upgraded Schwab from a sell to a strong buy rating.

At the time of our call, SCH shares were trading at roughly $12 a share.

Schwab recently posted earnings of $207 million, its best quarterly results in more than five years.

Citigroup (C) analyst Prashant Bhatia, one of the most bullish analysts on the stock, thinks Schwab is "entering a growth phase" that justifies as high as a 30% premium to other asset managers.

Lest we forget, shares of SCH are up 25% since we first implored you to buy.

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