Bank Stocks

al_bundy said:
The Big Picture | Its Unanimous: Banks Have Bottomed!

Interesting that all the big newspapers are saying the banks have bottomed
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Here is an interesting bit of advice from Barron on how to play the bottom in financials back in July, wouldn't have worked out to well. Never try to catch a falling knife...

But at today's prices, preferred shares are much more attractive
Besides Fannie Mae, there are plenty of other preferreds with double-digit yields, including Lehman Brothers , Wachovia and Washington Mutual . WaMu's is among the riskiest financial preferreds, trading for just 6.50, a fraction of its face value of $25, but WaMu says it's adequately capitalized. Many companies like Lehman, Citigroup and Wachovia have issued both fixed-rate "straight" preferred and convertibles. A convert, like the Lehman issue in the table, has the advantage of giving investors a call option on the stock. Converts usually yield less than straight preferred.
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Again, check out HBAN for a bank I believe is on the upswing.
 
Art G said:
Again, check out HBAN for a bank I believe is on the upswing.
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What do you see in this bank? The stock is down 39% from Sept 19th when you first reccomended it and 45 cents above it's 52 week low. It is in the middle of a depressed area in Michigan. What makes it better than other regional banks?
 
First off, HBAN is in a depressed part of Ohio!
Secondly, they were hit pretty hard in '07 and they made their way through it. They are still making a profit, which seems to be unheard of in the banking industry. They've already written off a bunch of their bad debt, so I believe they have a much greater upside potential than most banks right now.
BTW, I think I first recommended the stock earlier than that. You may have just seen my most recent.
 
Art G said:
First off, HBAN is in a depressed part of Ohio!
Secondly, they were hit pretty hard in '07 and they made their way through it. They are still making a profit, which seems to be unheard of in the banking industry. They've already written off a bunch of their bad debt, so I believe they have a much greater upside potential than most banks right now.
BTW, I think I first recommended the stock earlier than that. You may have just seen my most recent.
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They are in Ohio, but from my memory of a year ago when I looked at them when they were reccomended as a dividend play at 18, I believe the largest amount of loans they had were in the state of Michigan and very vunerable to the auto industry, at least that is my memory.

If I am remembering the right bank they had bought another bank which had a whole bunch of subprime loans on it's books that it had to eat and that prior to that they had been a real conservative bank. I may have to look at my old file on this guy again.
 
haha said:
Wow!

"Wachovia shares fell more than 90% in premarket trading, and the New York Stock Exchange did not open the shares for trading. Citigroup was off 1% at $19.95 shortly after the market opened."

This is getting real. Wachovia was supposed to be a good bank. Interesting investing sidelight was that insiders bought shares heavily several times on the way down, including just 2 weeks ago.

09/15/08BAKER JOHN D IIPurchase25,000$12.25306,250.0009/15/08GOODWIN WILLIAM H JRPurchase1 Mil$11.0011.00 Mil08/19/08SHERBURNE JANE CECILE*Grant164,107NANA07/23/08KELLY STANHOPE AGift5,000NANA07/22/08KELLY STANHOPE ASold5,000$13.9569,755.0007/22/08STEEL ROBERT KINGPurchase1 Mil$16.1716.17 Mil07/15/08STEEL ROBERT KINGGrant1.99 MilNANA03/05/08BAKER JOHN D IIPurchase10,000$28.75287,450.0003/03/08BAKER JOHN D IIPurchase10,000$30.37303,700.0002/28/08BAKER JOHN D IIPurchase10,000$32.00320,000.00

Ouch!

Ha
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Makes me think some of these bank execs don't even know and understand the exposure they have in these financial derivatives.
 
Running_Man said:
They are in Ohio, but from my memory of a year ago when I looked at them when they were reccomended as a dividend play at 18, I believe the largest amount of loans they had were in the state of Michigan and very vunerable to the auto industry, at least that is my memory.

If I am remembering the right bank they had bought another bank which had a whole bunch of subprime loans on it's books that it had to eat and that prior to that they had been a real conservative bank. I may have to look at my old file on this guy again.
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No, you're right. They bought out another bank and all their bad debt. Gave the CEO a nice retirement package then patted themselves on the back as the stock price died. They deserve a class action suit for mismanagement.
All that said, I think the stock has some upside.
 
Art G said:
No, you're right. They bought out another bank and all their bad debt. Gave the CEO a nice retirement package then patted themselves on the back as the stock price died. They deserve a class action suit for mismanagement.
All that said, I think the stock has some upside.
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If you're referring to Wachovia, I think they bought Golden West Financial, a California institution that invented the pick-a-payment loan, or at least it was thier growth engine until they had a spill.
 
jazz4cash said:
If you're referring to Wachovia, I think they bought Golden West Financial, a California institution that invented the pick-a-payment loan, or at least it was thier growth engine until they had a spill.
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The Sandlers built GWF on ARMs and then sold the whole shebang to Kenny Thompson because they saw the end of the show was coming. I remember reading an article about the sale in the WSJ, which all but accused Thompson of being a fool and the Sandlers of selling a ticking time bomb.
 
jazz4cash said:
If you're referring to Wachovia, I think they bought Golden West Financial, a California institution that invented the pick-a-payment loan, or at least it was thier growth engine until they had a spill.
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No, we were talking about HBAN. They bought out Skye Financial which dumped a whole lot of bad loans on them.
 
anyone want to bet that GS will hit around $40 a share before this is all over?
 
I guess if there's one company that I don't mind seeing correct, it would be GS. Freakin' snobs!
 
Citi and ML reported this morning, the writedowns continue
 
On the positive side both WFC and BBT had strong quarters. BB&T earned .65 easily covering there dividend of .46, despite increased loan losses.

Wells Fargo earned .49 despite almost 1.2 billion in loan charge offs and reserves, also covering the .34 dividend. The share prices of both companies have held up currently trading at 33-34 vs their lows of $18 BBT and $20 WFC. It looks like I and many others correctly called the bottom for the banking stocks back in July.

Under normal circumstances I'd said that both WFC and BBT would be good stocks for dividend investor, but considering so many other good companies stocks have been pounded, coupled with the partially nationalization of the banking industry, I'm not so sure.
 
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