Bank Stocks

[Lakewood90712]

Quote:

Originally Posted by Paws (Huntington Bank HBAN $16.97 div $1.06) price has dropped now itsdividend yield is 6.2%. Key Bank (KEY) $33.22 div $1.46 yield 4.4% National City $26.55 DIV $1.64 Yield 6.1%. Anyone think this could be a good source of income?

Like the robot in "Lost in Space" would say "DANGER! DANGER!" .

All of the above may well be good values , BUT the div and yeild will very likely return to the avg. for the sector very soon. If wall street was convinced the yeild will continue , the share prices would not be so far beaten down. I'm no stock wizzard , but I have bought stocks in the past for the reasons in your post and I got some expensive lessons.

[BUM]

Added to my bank stocks yesterday. I bought some WM. aka WaMu. Also added to my NCT position.

[Running_Man]

Quote:

Originally Posted by Paws What is everyones opinion on bank stocks? With all the subprime fears it seams like bank stocks have been drivin down. For example one of the local banks (Huntington Bank HBAN $16.97 div $1.06) around me price has dropped now itsdividend yield is 6.2%. Key Bank (KEY) $33.22 div $1.46 yield 4.4% National City $26.55 DIV $1.64 Yield 6.1%. These are just a few. Anyone think this could be a good source of income?

Since your post Key is down 9% HBAN is flat and National City is down 8%. Didn't like Bank Stocks then don't like them now. There is so little known about the values of their portfolios and what the ultimate outcome will be for home prices. If you believe everything is now fine and the Fed will just lower rates to let banks print money and we can just pick up where we were a year ago I can see where these would look appealing.

[brewer12345]

Quote:

Originally Posted by Running_Man Since your post Key is down 9% HBAN is flat and National City is down 8%. Didn't like Bank Stocks then don't like them now. There is so little known about the values of their portfolios and what the ultimate outcome will be for home prices. If you believe everything is now fine and the Fed will just lower rates to let banks print money and we can just pick up where we were a year ago I can see where these would look appealing.

Maybe such speculations are not for you.

At the moment, people hates them some bank stocks. History suggests this will not always be the case.

[Dawg52]

Quote:

Originally Posted by brewer12345 Maybe such speculations are not for you. At the moment, people hates them some bank stocks. History suggests this will not always be the case.

And when many are paying 5% plus dividends, not so hard to hold while the blood is still flowing on the streets.

[VaCollector]

While I am definitely in for the long haul.....these times where we give back in 2-3 days all that we have gained in the last 2 weeks....is quite disheartening

If there IS a silver lining it would have to be that my rate of dividend yield is increasing .....but I have to admit that I would rather see the yield fall and the stock prices go up and STAY up!

[Running_Man]

Quote:

Originally Posted by brewer12345 Maybe such speculations are not for you. At the moment, people hates them some bank stocks. History suggests this will not always be the case.

I disagree that people are hating the bank stocks they are down some but most unless they are specifically in the subprime area are down less than 20% from their peaks and are not much below 2006 levels when the excess was in full throttle. Having seen the devestation that can hit banks in times of financial difficulty they are the first stocks to be avoided. Losses of 50 percent are all too frequent in their history.

When Wa-Mu sends 20 peddlers to Chicago commuter trains offering 7.05% for one year on opening of new savings account you have to figure there is some big troubles there.

There will be plenty of time to wait to see how the air will clear without stepping into an industry where even the CEO's such as Citicorp say they really are surprised with how much the market is changing on them.

The 100 billion fund for buying out the mortgage securities so the banks will not be forced to recognize loses on their off balance sheet conduits reeks of desperation.

Waiting and saving a potential 30-50% of my principal is far more valuable to me than a potential 5% dividend and 10% upside. The downside risk on the banking stocks is just too very large. If the bank stocks hold their recent lows then that is a decent sign, but many are just falling further away. Since Oct 10th WaMu is down 17 percent, Key is down 10 percent and KRE has outperformed only dropping 9.1%. Of the choices I would prefer the choice KRE since you get the upside of an industry reversal and thier gains without the individual bank blowup potential for unknown land mines in a single portfolio.

[Lakewood90712]

Quote:

Originally Posted by Running_Man When Wa-Mu sends 20 peddlers to Chicago commuter trains offering 7.05% for one year on opening of new savings account you have to figure there is some big troubles there.

As much as I hate WA-MU and would take pleasure in seeing them croak , That cd deal is just a marketing tool , for new customers only, minimum $1 and max. $500 for one year, then goes to a crap low rate account automatically in year 2. Only available in certain states. Il is one of them.

[brewer12345]

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Originally Posted by Lakewood90712 As much as I hate WA-MU and would take pleasure in seeing them croak , That cd deal is just a marketing tool , for new customers only, minimum $1 and max. $500 for one year, then goes to a crap low rate account automatically in year 2. Only available in certain states. Il is one of them.

Heh, I have seen all kinds of oddball marketing efforts by banks. I heard about a bank that opened a branch in a supermaket. To get people interested, they sent branch staffers into the aisles with trays of quarters dimes and nickels offering "free samples."

[Running_Man]

Quote:

Originally Posted by Running_Man Since your post Key is down 9% HBAN is flat and National City is down 8%. Didn't like Bank Stocks then don't like them now. There is so little known about the values of their portfolios and what the ultimate outcome will be for home prices. If you believe everything is now fine and the Fed will just lower rates to let banks print money and we can just pick up where we were a year ago I can see where these would look appealing.

It is interesting to me that of the stocks initially listed Huntington Banc Shares have held up well. While Key has continued to drop -- now down 21.2% from the initial post and National City is down 15%. Huntington BancShares are also hovering just above it's multi-year low and was decimated earlier over the 12 months than the other two. I am curious to see if the declines will continue or if HBAN can jump to the top and posssibly out of its 3 month trading band of 16-18. I would take that as a very positive sign for the banking industry or sign of more trouble to come if new lows are struck.

[haha]

Quote:

Originally Posted by Running_Man It is interesting to me that of the stocks initially listed Huntington Banc Shares have held up well. While Key has continued to drop -- now down 21.2% from the initial post and National City is down 15%. Huntington BancShares are also hovering just above it's multi-year low and was decimated earlier over the 12 months than the other two. I am curious to see if the declines will continue or if HBAN can jump to the top and posssibly out of its 3 month trading band of 16-18. I would take that as a very positive sign for the banking industry or sign of more trouble to come if new lows are struck.

Do you see something special about Huntington that would make it a bellwether for the group, or is this just based on timing of its breakdown?

Ha

[Running_Man]

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Originally Posted by haha Do you see something special about Huntington that would make it a bellwether for the group, or is this just based on timing of its breakdown? Ha

I like the fact that their loans are dependent on Midwest housing and the automotive industry and their suppliers. If HBAN moves up out of the trading range I would think that would be a positive sign for the economy in general. Also from the 10K I have read I think their management is much more forthwright in what is occurring in their business as opposed to a bank like KEY which seems to be deferring the bad news. So they fess up to the bad news, probably not too good for the stockholder at a high but I like that at a low.

[Running_Man]

Quote:

Originally Posted by Running_Man It is interesting to me that of the stocks initially listed Huntington Banc Shares have held up well. While Key has continued to drop -- now down 21.2% from the initial post and National City is down 15%. Huntington BancShares are also hovering just above it's multi-year low and was decimated earlier over the 12 months than the other two. I am curious to see if the declines will continue or if HBAN can jump to the top and posssibly out of its 3 month trading band of 16-18. I would take that as a very positive sign for the banking industry or sign of more trouble to come if new lows are struck.

Well HBAN has broken 16 this morning and KRE is making a new low again today and not surprising the market is on a big break again with this occurrence. Len Walter on WBBM business news in Chicago was claiming to have talked to a Bank of America executive who told him Bank of America was going to have to cut their dividend, I cannot find anything on that on the internet but shortly after he said that BAC dropped from 44.5 to 43.75.

[brewer12345]

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Originally Posted by Running_Man Well HBAN has broken 16 this morning and KRE is making a new low again today and not surprising the market is on a big break again with this occurrence. Len Walter on WBBM business news in Chicago was claiming to have talked to a Bank of America executive who told him Bank of America was going to have to cut their dividend, I cannot find anything on that on the internet but shortly after he said that BAC dropped from 44.5 to 43.75.

What's the saying?

"A lie can run around the world before the truth can get its boots on."

[Running_Man]

There is no doubt I would not consider what Len Walter said as anything more than an unsubstantiated rumor, which is why I looked on the interenet to see if there was an announcement. Normally would not repeat but Len Walter is definitly an old school business reporter.

[brewer12345]

Patience, grasshopper. Wait for the Fed cuts to continue and work their magic.

[VaCollector]

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Originally Posted by brewer12345 Patience, grasshopper. Wait for the Fed cuts to continue and work their magic.

thanks for the encouragement Kimosabe ....I can't wait until I can actually say ~ "You told me so!"

[VaCollector]

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Originally Posted by brewer12345 Patience, grasshopper. Wait for the Fed cuts to continue and work their magic.

OK fellow bank stock holders.....let's talk!

Citi below $5 a share; BAC fast approaching $10/share; BCS under $8....

As some of you may remember, I am DEEP into BAC and have taken the full ride from $55 to present levels....and it is (or WAS) the biggest part of my portfolio....with my returning to some sort of w*rk almost assured now, I am now trying to focus on the future of my financial investments.....HELP!

I know that I shoulda, woulda, coulda....but I have to get past that and see what I can salvage from what's left....

It would seem that my 1st focus should be on harvesting tax losses - some or maybe even a lifetime's worth.....what say you?

Assuming that my loss is about $40+ per share, would you sell a few shares or maybe all?

Brew once said something to the effect that if BAC fails, we will have a lot more serious issues to deal with.....well, I can't say that my current confidence level is good...'cause it looks like a distinct possibility.....I would have to say that if C fails that BAC couldn't be far behind....

D*mn, I sure wish that I had taken up drinkin' at some point in my life....'cause this sh*t is drivin' me !!!

[Running_Man]

Quote:

Originally Posted by VaCollector OK fellow bank stock holders.....let's talk! Citi below $5 a share; BAC fast approaching $10/share; BCS under $8.... As some of you may remember, I am DEEP into BAC and have taken the full ride from $55 to present levels....and it is (or WAS) the biggest part of my portfolio....with my returning to some sort of w*rk almost assured now, I am now trying to focus on the future of my financial investments.....HELP! I know that I shoulda, woulda, coulda....but I have to get past that and see what I can salvage from what's left.... It would seem that my 1st focus should be on harvesting tax losses - some or maybe even a lifetime's worth.....what say you? Assuming that my loss is about $40+ per share, would you sell a few shares or maybe all? Brew once said something to the effect that if BAC fails, we will have a lot more serious issues to deal with.....well, I can't say that my current confidence level is good...'cause it looks like a distinct possibility.....I would have to say that if C fails that BAC couldn't be far behind.... D*mn, I sure wish that I had taken up drinkin' at some point in my life....'cause this sh*t is drivin' me !!!

You may remember me at the time, I was concerned that the low on BAC would be $12 based on previous losses on banking stocks when BAC was trading for $50 and that the KRE regional banking index would fall to $24-$26 when it was trading at $42, I also thought that Citicorp would possibly fall out of existence when it was trading at $40 since they had more exposure than anyone at the time and when there were serious economic declines, bank stocks performed very poorly and that prompted the offsetting comment by Brewer you quoted.

An issue that has transpired in the past year was the purchase of Wal-Mu by BAC, which is not working right now as they thought it would and the Merrill Lynch fiasco. The dividend has been cut and is more likely than not I think to be cut again. Knowing what their business model will provide going forward seems very murky to me, but their safety as a dividend provider is very much in doubt.The safety rating on BOA on value line was lowered on 10/17/08 the stock price on that date was 23 and would have caused me to immediately sell myself it is a very negative indication in my experience using Value Line.
http://www.valueline.com/dow30/f6291.pdf

At this point it is hard for me to know what the right approach to take is. However, I would in these times want to be in equity stocks where I am more sure the dividend is safe. My top 2 stocks for that right now are KO and JNJ, yielding 3.6% and 3.3% respectively. It still seems to me these stocks could decline to a 5 percent dividend yield before the market reaches a bottom, but I would still be willing to buy even more at that price. Other candidates in my mind are PG (however I would not buy until it fell to a 3.5% yield or greater) Chevron, UTX which has more economic exposure than JJ or KO and DD which is a more speculative play, however a very great company with a juicy yield which could be one speculative issue I would be willing to buy. On any of these individual stocks though I would sell if either the Safety Rating or Financial Strength was lowered by value line. Their ability to lower and downgrade, as in the case of Bank of America, is not stopped by market pressures.


I would avoid any stock that holds any amount of debt as the market is destroying those companies right now (i.e. the REITS). These stocks can be easily followed and watched on the Value line website for declines in either their financial strength or Safety.

[Leonidas]

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Originally Posted by Running_Man Other candidates in my mind are PG (however I would not buy until it fell to a 3.5% yield or greater)

You think the price is going to drop that much? Not that I doubt the possibility in this market, but I bought on the 24th of last month just before it hit it's low (for the moment anyway) and the yield was still short of 3% then.