With today's rumors of Bank of America Corporation (NYSE: BAC) in talks to buy Countrywide Financial Corporation (NYSE: CFC), here are two more stocks that have gotten crushed, which may be targeted as M&A candidates. Here are 2 financial stocks that I think have a fairly good chance of getting taken over by the end of '08.
E Trade Financial Corporation (NASDAQ: ETFC), the online brokerage, has lost investors tons of money. The company is shedding non-core divisions and getting back to basics. Etrade usually is involved in rumors of either joining or buying TD Ameritrade Holding Corporation Corp. (NASDAQ: AMTD), and I think that we are going to see some movement in terms of selling the online brokerage firm. At just around $4/share, these stocks are beginning to look interesting again.
Washington Mutual, Inc. (NYSE: WM) has seen its stock drop by some 75% over the last year. The stock is trading with a PE of a bit more the 4, and has a dividend yield over 17%. Now I would guess that most analysts believe the dividend is going to be cut. I wouldn't be at all surprised to see a foreign bank that wants to get a big foothold in the US to make a play for the bank.
With stocks so low, look for cash rich companies to be on the prowl for interesting financial companies.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has a position and owns stock in ETFC and is long the stock. He has no positions in any other stock mentioned as of 1/10/08.
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Reader Comments (Page 1 of 1)
1-10-2008 @ 10:08PM
daniel.cooper53 said...
Etrade announced today that they are within 15-60 day's from announcing a new CEO. My hunch is the new CEO will be the CEO of Ameritrade. I believe come February Etrade will be Acquired by Ameritrade.
Ameritrade reported several times that they are looking for an acquisition. Ameritrade want the retail stores along with the banking business that Etrade offer's. This is something they don't currently have. This deal will be similar to CFC. If you don't have share's when the announcment is made you will have missed out on some quick cash.
What is Etrade worth? Clearly more than the current stock price.
The 24th of January Etrade will surprise all the analyst's. These analyst's have been doing their best to drive the share price down on Etrade and misguiding investor's. I will no longer value analyst's from Citigroup.
Dan Blue
2-02-2008 @ 7:13PM
daniel.cooper53 said...
Etrade announced today that they are within 15-60 day's from announcing a new CEO. My hunch is the new CEO will be the CEO of Ameritrade. I believe come February Etrade will be Acquired by Ameritrade.
Ameritrade reported several times that they are looking for an acquisition. Ameritrade want the retail stores along with the banking business that Etrade offer's. This is something they don't currently have. This deal will be similar to CFC. If you don't have share's when the announcment is made you will have missed out on some quick cash.
What is Etrade worth? Clearly more than the current stock price.
The 24th of January Etrade will surprise all the analyst's. These analyst's have been doing their best to drive the share price down on Etrade and misguiding investor's. I will no longer value analyst's from Citigroup.
Dan Blue
1-11-2008 @ 10:20PM
Gary said...
Dan Blue,
This is my first use of this or any other chat type thing. You are one of the first guys that seem to know whats going on. Are you a investor like me, or an analyst, or broker? I learned when I started trading, never to listen to what the brokers say about a stock. This seems to have been true again with ET. I do own shares and I borrowed money to buy more while it was $2.20 and .40. I'm not rich and I borrowed enough to buy 10,000 more shares, but while waiting for the credit card (zero % interest) money to be sent which will be Monday I think. (1/14/08), ET went up to over $3. That was disappointing. I knew nothing about trading, but learned with ET. After loosing a few thousand I got the hang of it and have since made several hundred thousand $'s. (About 5 years) I think you hit it right on the head, they're trying to get people to sale so that when it gets very low, they will buy. (By they I mean the Citigroup guy). I figured he lost during the big $26. fall out. Now he's pouting and wanting to blame someone. I too think ET will be bought out very soon. I thought the buy out would be more like $6./share, but in one article today they estimated the price at $4. What do you think about that? I owned 12,200 shares, and want to get more. If I can get 10,000 more at $2.40 it'd sure please me. I've followed ET for 8 to 10 years and it's been fun.
I doubt you want to hear about my trading, but I just wanted to tell you it's good to hear someone who seems to know whats going on at ET. I talked to customer service at ET and they assured me bankruptcy is not an option. I will put my email in case you would like to tell me what you think the takeover price will be, if/when it happens. If I did wrong by sending this please excuse me. It's just good to hear someone say something good about a company I know is good. If a buy out happens I sure hope they don't change it around a lot. captgary55@hotmail.com Gary.