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WHI Westerbank Puerto Rico
Old 07-13-2007, 09:05 AM   #1
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WHI Westerbank Puerto Rico

WHI has been discussed before. Is anyone still following it?

I saw in late June they disclosed a material impairment of at least $80MM on one of their asset-backed loans. It appears the total loan balance of the impaired loan is about $140MM.

On one hand, that could wipe out the earnings for a whole year, but on the other hand the balance sheet shows equity of about $1.2B and 165MM shares, so the book value is about $7.25 (before the fallout from any impaired loans).

It's trading around $2.80 or so now so it seems that the market has decided that not only this one loan is bad but that they are expecting quite a few other bad loans too. (Heck, they'd need about $700MM in totally bad loans to get the book value down to market price.)

Based on the balance sheet it looks like they have plenty of capital to meet the necessary ratios even if there were quite a few other bad loans.

Earnings for the year could get wiped out and dividends could be cut going forward since I think they pay them based on the previous two years of earnings.

Anyway, in the interest of full disclosure I went ahead and bought some. Just curious if anyone else has thoughts on it.
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Old 07-13-2007, 09:33 AM   #2
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I bot it. Bot some bpop too, since bpop got pull down by whi.
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Old 07-14-2007, 09:53 PM   #3
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I hope it works out for us semtex.

I thought I remembered some other people who were buying it a while back (it seemed like a decent price even back then, it seems like a real bargain now to me).
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Old 07-23-2007, 06:53 AM   #4
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I consider myself overwieghted in regional bank stocks. The prices are dirt cheap and many with nice dividends as well.
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Old 07-24-2007, 02:47 PM   #5
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Speaking of regional bank stocks, KRE (an ETF of regional bank stocks) is getting smacked again today.

BUY BUY BUY.

Disclaimer: I own none, but REALLY starting to wish I did.

Thanks for the "heads up" brewer.

-CC
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Old 07-25-2007, 02:23 PM   #6
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Today meathead Cramer says to SHORT KRE.

Amazing.

-CC
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Old 07-26-2007, 05:47 PM   #7
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Well, short term I'd say Cramer was right about KRE. Yikes.

Anyway, I bought some more WHI at 2.30. It seems ridiculously cheap to me. Time will tell.
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Old 07-26-2007, 07:54 PM   #8
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Quote:
Originally Posted by CCdaCE View Post
Today meathead Cramer says to SHORT KRE.

Amazing.

-CC
He didn't like shipping stocks either. Now that they reached all time highs, he jumps on the band wagon. A momentum kind of guy. I'm not saying one should fight momentum, but I like to buy on the cheap.(as long as there is a good future to the company or sector)
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Hrm.
Old 07-27-2007, 07:33 AM   #9
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Hrm.

Quote:
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He didn't like shipping stocks either. Now that they reached all time highs, he jumps on the band wagon. A momentum kind of guy. I'm not saying one should fight momentum, but I like to buy on the cheap.(as long as there is a good future to the company or sector)
Yeah, he was very right for one day so far.

When/if this whole subprime thing unravels a little more, I suspect he'll be right again. But, in a few years those bank stocks are bound to get lofty again. Maybe that'll take a long time, but I've got time. How long is Warren Buffets' holding period? Forever? (usually).

Again, I've not yet pulled the trigger -- I'm all hot air at this point.

-CC
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Old 07-27-2007, 09:22 AM   #10
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Looks like these PR banks are still falling even with the market up a bit today.....I think that I will wait a bit to see where BPOP drops to add some more....
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Old 07-27-2007, 03:36 PM   #11
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Looks to me to be a recovery play.... not sure if I would want to wait to see when it happens..

Who knows what else is hiding in the weeds and if there will be some lack of confidence to cause a run on the bank and a fire sale...

And it looks like it took another beating today...
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Old 07-27-2007, 03:48 PM   #12
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Market very bad, I guess everybody knows it already.

I cut my WHI position around 2.8 two weeks ago. That's good. Bad thing is I bot more BPOP.

I am buying more TRGL. I fully loaded around 15.5. Now doubling my position.
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