In the Cramer blog post, “How to Survive the Banking Meltdown”, which bank ranked “Almost as Bad as the Worst”?
Almost as Bad as the Worst: National City (NCC), Washington Mutual (WM) and First Horizon (FHN)
FIRST HORIZON NATL CORP
FHN
7.23 1.34 +22.75%
NYSE
Picks & Pans: In “Options Bubble on Financial Trouble,” whose “implied volatility” shot up 101% Monday?
“Keep an eye on Washington Mutual,” sha said. “When I spoke to your producers at about 10:30 a.m. this morning, its implied volatility was up 37 percent. When I left the office to come to the studio here, it was up 101 percent, and again we saw traders selling volatility in the front month.”
In Wednesday’s Stop Trading post, Financials Fallout, which entity had Jim Cramer “consistently concerned”?
“I have just been consistently concerned about Bank of America (BAC), both its yield and post-Countrywide,” began Cramer.
Given that my models show poor earnings quality, poor earnings momentum and poor price momentum, I can see why. The return potential, however, looks good if the other factors don’t end up drowning it out.
In a July 8 feature, Boone Pickens told CNBC he’s sticking with $150 oil for 2008. But where did Lehman Bros. see oil?
Also on Tuesday, JP Morgan (JPM - Annual Report) said U.S. crude futures may hit $150 later this month, while Lehman Brothers (LEH) raised its oil price forecast to an average $127 a barrel for 2008 from its previous assumption of $105.
My latest column is up at RealMoney.
With the stock market flirting with “official” bear market territory, I realized I hadn’t written a bearish piece in a couple of months. Not wanting to buck the trend any longer, I decided to look through the models I follow to see which stocks might be on the pricey side. I think I found one in ACI Worldwide (ACIW) .
ACI develops, markets, installs and supports a broad line of software products and services primarily focused on facilitating electronic payments. The company’s products and services compete with offerings by Fiserv (FISV) , Fidelity National Information Systems (FIS) , S1 Corporation (SONE) , Metavante (MV) , Euronet (EEFT) , Fair Isaac (FIC) , Visa (V) and MasterCard (MA) .
About the only argument one can make in favor of a long position is that the stock has come down a lot — nearly 50% from last July’s peak. Unfortunately, at last July’s peak it had already come down a lot from the prior year’s peak. It is amazing to me that a stock performing so poorly can still be valued as highly as it is. For now, I’m not counting on a reversal in price momentum.
For those of ACI Worldwide’s peers that have earnings on which to base a P/E multiple, the average P/E is about 16. At 16 times the 58-cent current 2009 consensus estimate for ACI Worldwide, the stock would trade at just $9.28 — 46% below the current level. Even at the 21 times multiple S1 enjoys, the downside could be 30%. And those prices assume the company will actually earn what analysts believe it will. As noted earlier, that has not been a safe bet of late.
Disclosure: At time of publication, William Trent has no financial position in the companies mentioned in this article.
Guest Blogger Vince Farrell marvelled at Goldman Sachs’ market-moving ability. Who did Farrell say Goldman “unloaded” on?
Yesterday they unloaded on Citi and GM and those stocks got hit. Goldman effect?
As I noted earlier, my strategy has so far been not to be long Citigroup. It gets low marks for earnings quality, price momentum and free cash flow in the models I follow. As for GM, it doesn’t even qualify to run through the models.
In the blog post, “Options Action: Make $$$ on Financials”, Stacey Gilbert talks up a strategy for
Gilbert says there is a strategy for investors who are long stock, naming Citigroup (C - Annual Report) specifically.
My strategy has so far been not to be long Citigroup. It gets low marks for earnings quality, price momentum and free cash flow in the models I follow.
Warren Buffett Watch: According to Adolphus Busch IV, how big a stake does Berkshire Hathaway’s CEO hold in Anheuser?
“Mr. Buffett, who holds a 5% stake in Anheuser-Busch has a notable reputation for assisting in matters where family ownership is at stake,” Adolphus Busch IV, August Busch IV’s uncle, said in a statement.
As for me, I’m taking the money and running when it comes to Anheuser-Busch (BUD).
In “Take Your Position: Financials” Fast Money’s Guy Adami says “take at least half your position off the table” for:
If you’re long Lehman (LEH) take at least half your position off the table, he replies.
In Bob Pisani’s blog post “Using Analysts As Contrarians?” which financial firm’s employee is mentioned by his full name?
How about Guy Moszkowski at Merrill Lynch?
Free Annual Reports
