Otvaranjem blog unosa na temu FINANCIALS automatski prihvacam financijski sector pod svoju ingerenciju (ako nema nitko nista protiv) za pracenje I analize.
Financialsi opcenito stoje vrlo labavo i volatilno u ovom marketu, izuzetno su osjetljivi na vijesti poput nove Sub-prime krize, Write-offova a FEDove kamate da I ne spominjemo..Trenutacno ih kategoriziram HOLD, s tim da drzimo oci sirom otvorene na izjave FEDa o sljedecim potencijalnim rezanjem kamatam. Zbog toga za sad samo u grubo analiza kandidata.

Krenimo redom….
Financials: Insiders Buying on Consistent Basis
Wachovia (WB) insiders are buying shares on a consistent basis. When you couple this with recent news, it seems to be a sign of a general trend in financials. Lanty L. Smith, a director of Wachovia Corp. bought 40,000 shares of common stock, according to a Securities and Exchange Commission filing Friday. This follows purchases earlier by other insiders, including smith himself.

In a Form 4 filed with the SEC, reported buying the shares last Thursday for $34.76 a piece for a total purchase of $1.39 million. This follows recent announcements that for the first time in years, net insider purchases of stock outpaced sellers. Usually, due to options received by insiders, net sales are more than purchases.

While it is hard for us looking in to quantify the recent effects of the dramatic rate cuts on financials by the Fed, if we follow the insider buying or interest in financials by "value investors", we get a good picture. Berkshire Hathaway's (BRK.A) Warren Buffett and Wilbur Ross are getting interested, Leucadia (LUK) is buying up shares of AmeriCredit (ACF), Citigroup (C) has seen insider buying and Bank of America (BAC) has got what will be seen as perhaps the bargain of the year in Countrywide (CFC) and Richard Pzena is buying shares of Citi and Freddie Mac (FRE).

Financials (XLF) seemed to have bottomed on Jan. 18th, and it is no coincidence the famed bottom dwellers above are circling.

CITIGROUP (C)

Last Trade: 25.48
Trade Time: Feb 15
Change: 0.26 (1.01%)
Prev Close: 25.74
Open: 25.49

1y Target Est: 30.59

Day's Range: 25.00 - 25.96
52wk Range: 22.36 - 55.55
Volume: 87,376,374
Avg Vol (3m): 100,109,000
Market Cap: 127.26B
P/E (ttm): 35.54
EPS (ttm): 0.717
Div & Yield: 1.28 (5.00%)

PriceTarget Research, Inc.
Citigroup has a current Overall Rating of C (Neutral). Appreciation potential (93) is very high; Power Rating (3) is very low. Relative to the S&P 500 Composite, Citigroup Inc has moderate Value characteristics -- its appeal is likely to be to investors heavily oriented toward Income. C is of high investment quality. Current annual total return performance of 11.1% is slightly below median. Current 5-year total return performance of 10.5% is substantially above median.

P/E od 35,5 je jako visok, prosjek industrije je 7, a S&P 500 16.
52 WK High od 55.55 je bio 30.5.2007.; od tad ima down trend s tim da je od pocetka godine down 12,57%.

TheStreet je NEUTRAL (HOLD).
FAD mi govori da bi sljedecih mjesec dana trebali biti neutralni a nakon toga bi moglo gore (probio je close liniju i drzi se visoko u pozitivnom teritoriju u odnosu na close).
OI i Volumeni su prilicno jednkao distribuiran i izmedju callova i puteva.

JP MORGAN CHASE (JPM)

Last Trade: 43.25
Trade Time: Feb 15
Change: 0.64 (1.50%)
Prev Close: 42.61
Open: 42.41

1y Target Est: 48.32

Day's Range: 42.01 - 43.25
52wk Range: 37.66 - 53.25
Volume: 29,037,010
Avg Vol (3m): 31,876,400
Market Cap: 145.64B
P/E (ttm): 9.87
EPS (ttm): 4.38
Div & Yield: 1.52 (3.60%)

CAPS: 2 stars out of 5 (unattractive)
This company has the largest share of $.9 trillion in US credit card debt. These guys could be the catalyst for the downfall EVERYTHING!

A friend of mine had accumulated over $100K of credit card debt as he moved the balances around from card to card (smells like sub-primes). Eventually chase bought all the banks, now they have all his debt. I saw his bill with my own eyes, he has a 33% interest rate!!! It's ludicrous! How does this happen? He pays for everything with his card and uses all is money to pay the cards. Everything about this is wrong.

When the sh!t hits the fan, gov't won't bail anyone out. It will be a HUGE stabilization that could kill the dollar.

Get your euros out.

P/E 9.78, Industry avg 10, S&P 500 16
52 WK High je bio 09.05.07., od pocetka godine je down 2.38%

TheStreet: BUY
FAD je neutralan s blagim pozitivnim pomakom, promatramo ga iducih dan dva, ako se IV preokrene moglo bi biti nesto.
Volumeni su na strani callova, pogotovo na strike 47.5.

BANK OF AMERICA (BAC)

Last Trade: 42.70
Trade Time: Feb 15
Change: 0.46 (1.09%)
Prev Close: 42.24
Open: 42.00

1y Target Est: 44.50

Day's Range: 41.68 - 42.70
52wk Range: 33.12 - 54.17
Volume: 51,283,413
Avg Vol (3m): 41,723,900
Market Cap: 189.50B
P/E (ttm): 12.77
EPS (ttm): 3.344
Div & Yield: 2.56 (6.10%)

The Coming Battle Over BofA-Countrywide
A major battle is brewing over the proposed acquisition of Countrywide Financial (CFC) by Bank of America (BAC). To my mind, this battle is not just over the purchase price of CFC shares, but rather a conflict about when the mortgage market will return to normalcy.
Bank of America agreed on Januray 11 to buy CFC for about $4 billion, $500 million below the already-depressed trading price of CFC. If the transaction would close right now, BAC would pay around $4.45 billion, or a 10% premium off the current price for a share of CFC.
The battle over this merger is shaping up between Bank of America and at least two activist investment funds, Legg Mason Capital Management (LM) and SRM Fund Management (Cayman) Ltd. The debate: Are the capital markets dysfunctional enough that Countrywide essentially must sell, or will the mortgage market rebound soon because of the Federal Reserve’s monetary policy and the president’s budget-stimulus package?
Legg Mason and SRM have a more optimistic opinion of the mortgage market’s future. In his recent note to investors, Bill Miller, chairman and chief investment officer of Legg Mason Capital, wrote that:
We were quite surprised by the decision to sell the company at close to a seven-year low in the stock price … What makes the decision puzzling is that the company was seeing solid deposit growth, has no apparent capital problems, was not forced by the regulators to seek a merger partner, and is in sufficiently sound condition to have declared its regular quarterly dividend at the end of January.
Countrywide’s production is clearly in free-fall. In the fourth quarter 2007 CFC originated $61.2 billion of loans compared with $90.4 billion in the third quarter and $117.8 billion in 4Q06. But year-over-year Countrywide did fine, originating $385.1 billion vs. $421.1 billion in 2006 – a decline, but by no means an origination total to lament.
Countrywide sees a darker future. The fact that not a single securitization backed by mortgages has come to market since November suggests that a stand-alone lender just cannot survive in the modern financial world.
A central figure in this narrative is Goldman Sachs (GS). Countrywide paid Goldman $12.75 million to determine whether the deal was fair; the investment bank determined that it was. However, Goldman based a large part of its decision on the situation in the capital markets. And whose take on the capital markets did Goldman use? Countrywide’s!
“Countrywide advised Goldman Sachs that these [capital market] exposures had negatively affected recent financial results and that there was a material risk that they would impact Countrywide in the future,” Goldman wrote to Countrywide.
Then, Goldman made it clear that it:
... is not an expert in the evaluation of loan and lease portfolios for purposes of assessing the adequacy of the allowances for losses … and, accordingly, with the consent of Countrywide, Goldman Sachs assumed, with respect to Bank of America, that such allowances are in the aggregate adequate to cover such losses.
Goldman Sachs not an expert in the evaluation of loan and lease portfolios? This is hard to swallow.
I have issues with Goldman’s verdict on the deal. From Bank of America’s S4, it appears as though Goldman could have presented a more forceful opinion on the deal. Shareholders deserve a more declarative opinion. But clearly Countrywide on Jan. 10, the day before the merger was announced, was looking down the barrel of the capital markets’ gun, and saw a bullet entering its chamber. Today, does the merger still make sense? Will it still make sense after the bond issuers are set straight? I don’t know. As Miller says, CFC has a put option to Bank of America. That’s not a bad trade to have in hand.
CAPS: 3/5 (Appealing)
The Street: HOLD

P/E 12.61, Industry 12.80, S&P 500 16

FAD je bullish, OI i Volumeni su na CALL strni.

GOLDMAN SACHS (GS)

Jedan Trader na “Fast Money” ga je citirao kao strong recommendation.

Goldman je inace moja favorite banka. Osobno mislim da je ova razina dno ili blizu dna I da ce se Goldmanitesi uspjeti izvuci iz ove situacije. No, osobno misljenje nije dovoljno:

Last Trade: 178.41
Trade Time: Feb 15
Change: 1.85 (1.05%)
Prev Close: 176.56
Open: 175.10

1y Target Est: 231.57

Day's Range: 173.37 - 178.79
52wk Range: 157.38 - 250.70
Volume: 12,451,811
Avg Vol (3m): 11,734,300
Market Cap: 70.63B
P/E (ttm): 7.21
EPS (ttm): 24.73
Div & Yield: 1.40 (0.80%)

TheStreet: BUY
P/E 6.77, Industry 7.2, S&P 500 16

FAD izgleda blago bullish, Volumen opcija za March kao I OI idu u prilog PUTeva.
Drzimo ga pod budnim okom.

Toliko za sada, detaljnija analiza svake kompanije slijedi cim se nesto zakuha a u medjuvremenu ih, kao I neke ostale financijase, pratim. FAD slike i ostale attachmente stavljam cim mi WS da admin status, FAD-ovi stvarno izgledaju preljepo, jos jednom hvala Felix-u!!!

Bilo bi jako dobro kad bi netko Cramerove preporuke sa TheStreet-a izanalizirao.

Pozdrav svima!

Mr. X