Don't Be Fooled by These Big Earnings

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The following video is part of our "Motley Fool Conversations" series, in which consumer-goods editor and analyst Austin Smith discusses topics around the investing world.

In today's edition, Austin sheds a little light on the crazy-high earnings-per-share growth that's being projected for the finance sector. At 55.5%, it's far and away expected to be the best performing of the 10 sectors on the S&P. However, this growth is overwhelmingly due to Bank of America's huge mortgage writedowns in this same quarter last year, making comparisons far easier. Even backing out the banking giant, though, the finance sector is still expected to show the largest EPS increase of any S&P sector. But after putting these earnings into perspective, the finance sector is about as cheap as ever.

For investors who understand what they're getting into, they could be picking up "The Stocks Only the Smartest Investors Are Buying." These finance stocks aren't just Foolish recommendations, either: The sector has received multiple votes of confidence from Warren Buffett himself. But because his portfolio is so large, you can buy some of the best companies that he can't. Click here to read more about them.

At the time this article was published Austin Smithhas no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America, Citigroup , and JPMorgan Chase. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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