Bank Stocks

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Paws

Dryer sheet aficionado
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Aug 13, 2007
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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?:cool:
 
Bank stocks in general are an amazing bargain, IMO. You can pick single names if you like, or you can just buy KRE, a regional bank ETF.
 
You may want to take a look at BTO. It's a CEF that specializes in the Banking industry. Pays a 13% Div.!!! Please do your own DD. Full disclosure, I own this CEF.
 
Paws said:
These are just a few. Anyone think this could be a good source of income?:cool:
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When I first started investing I let my then adviser talk me into WFC. I don't think they were paying a dividend back then, or it wasn't much of one if they were. I wasn't in love with it when I bought it but I had a lot of trust in the woman advising me and she was really a believer. So I went with it, but just a couple of hundred shares. It just sat there in my portfolio for years before I noticed that it had slowly been gaining share price, was paying a dividend and split. It's steadily grown, split and increased the dividend over the years to where it's the biggest single issue in my portfolio and by far the biggest source of dividend income. I love it - best [-]thing I ever got talked into[/-] decision I ever made. I hate the fact that I have to make some sales to trim it's size in the portfolio, but even with this consistent winner I don't think it's wise to have too many eggs in one basket.
 
The Norwegian widow has: BAC(bought as Fleet Boston), JPMorgan, Citigroup(bought as ??) and UBS - Ag(Paine Webber). Also a tad of Suntrust(STI).

heh heh heh - she likes those dividends!
 
I have been a shareholder of National City for some time and have been adding...6%+ qualified dividends sounds good to me...
 
Paws said:
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?:cool:
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Huntington Bank is one of the best run banks in the US...........;)
 
I just bought Barclays (BCS). Now that they have lost the battle for ABN Amro, I expect that they will recover some of the swoon in share price that occurred after they started their campaign for ABN. Right now, the dividend exceeds 5.5% and they have share buyback authorization exceeding $3 billion by the end of the year. A major global player with earnings largely outside the US, so it is a hedge on the dollar. I think the suspicions around their potential trading losses is overblown. Finally, during the last several months, this stock has been heavily shorted. If the trend reverses strongly with this news and the shorts need to cover, there could be a nice pop ahead.
 
BCS is probably a good choice. Just never gets cheap enough for a dirty bottom fisher like me.

BTW, the market seems to have decided banks aren't so bad after all. Lately, even banks that announce big write-offs from mortgage nonsense are going up. Not a bad sign for those of us who took the plunge and bought.
 
Gumby said:
I just bought Barclays (BCS). Now that they have lost the battle for ABN Amro, I expect that they will recover some of the swoon in share price that occurred after they started their campaign for ABN. Right now, the dividend exceeds 5.5% and they have share buyback authorization exceeding $3 billion by the end of the year. A major global player with earnings largely outside the US, so it is a hedge on the dollar. I think the suspicions around their potential trading losses is overblown. Finally, during the last several months, this stock has been heavily shorted. If the trend reverses strongly with this news and the shorts need to cover, there could be a nice pop ahead.
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I bought it on 9/10 at 47.51/sh. I wasn't expecting a quick rebound like we have seen, but I will take it. S & P still has it rated a strong buy with a $67 target. Nice dividend too. :)
 
Paws said:
(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?:cool:
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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:(.
 
Added to my bank stocks yesterday. I bought some WM. aka WaMu. Also added to my NCT position.
 
Paws said:
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?:cool:
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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.
 
Running_Man said:
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.
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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.
 
brewer12345 said:
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.
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And when many are paying 5% plus dividends, not so hard to hold while the blood is still flowing on the streets.
 
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 :rant:

If there IS a silver lining it would have to be that my rate of dividend yield is increasing :D .....but I have to admit that I would rather see the yield fall and the stock prices go up and STAY up! :bat:
 
Patience, grasshopper. Wait for the Fed cuts to continue and work their magic.
 
Friedman, Billings, Ramsey

Big article about FBR in yesterdays's paper.......I may jump in for a small taste, but would like to see a bit more yield (5% dividend)

washingtonpost.com
 
brewer12345 said:
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.
Click to expand...

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.
 
Like I said, maybe such speculations are not for you.
 
What about the rumoured $100 billion exposure at Citi to the SIVs risks?

Man I have never seen such a bunch a 3 and 4 letter acronyms that emerge as bearers of bad news.
 
The Wall Street Journal story on that was hillarious. Banks are in a panic and they the Feds called in the inventors of the financial package to try and understand what the hell is going on. There is a realization by the Feds that banks are totally in jeporday if this financing vehicle which is on no banks balance sheet but they are on the hook for 100% will go belly up.

The 100 billion fund is merely a way to continue the financing of the SIV's for 6 months as that is how much of the paper is scheduled to come due and the idea is by then the crisis will have passed. If instead home prices continue to fall and creditors default these will be the worse possible investments and there is not a dime of reserve on any bank for any of them.

These investment vehicles are very reminiscent of the Enron investment vehicles that Enron used for their off balance sheet financing. Expect legislation banning the offbalance sheet vehicles
 
Running_Man said:
I don't disagree that the govt will do something stupid with SIVs.

That being said, I'm looking at the disclosures now that Citigroup made. They're pretty darn clear about what they were doing. If they were trying to hide it, they weren't trying very hard.
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