Schaeffer's Daily Contrarian: Optimism Builds Toward Charles Schwab

Tue Jul 14, 2009 2:52pm EDT

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CINCINNATI--(Business Wire)--
This article takes a bullish look at the shares of Charles Schwab (NASDAQ:
SCHW). The company is currently in the process of cutting prices, reducing
minimum investments, and rolling out new products aimed squarely at luring
customers. Specifically, the company has slashed its minimum amount required to
invest to just $100, compared with Vanguard's $3,000 minimum. Meanwhile, the
firm is also seeking Securities and Exchange Commission approval to roll out its
own family of exchange-traded funds.

The article opines that the security is "well-positioned to benefit from the
confusion within Wall Street's broker community. And the stock looks pretty
cheap too." In fact, Paul Rasplicka, who manages AIM Capital Development Fund
and AIM Dynamics Fund, believes that the company is poised to impress with
earnings. "The consensus sees 75 cents in '09 and $1 in 2010-we think that's
understated," Rasplicka says. In fact, he thinks earnings will beat expectations
by at least 20%. Rasplicka likes the stock. At 16.50 last week, the shares are
trading at 17 times earnings, and give a total market cap of $19 billion.
Schwab, he says, ought to trade at a multiple of 20, which would put the stock
in the low 20s-at least 20% more than last week's price.

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Schaeffer's Investment Research
Jocelynn Drake, 513-589-3800
jdrake@sir-inc.com