E*Trade (NASDAQ: ETFC) "is a high higher-risk trade, so do not bet the house; however, I believe the opportunity is still compelling," says Ian Cooper in Small Cap Trading Pit.
"About 10 insiders are betting heavy that E*Trade Financial will turn itself around this year. The filings are revealed here:
- Hayter, director 4,917 at $4.06
- Layton, director 245,800 at $4.06
- Fisher, director 31,806 at $4.06
- Randall, director 29,500 at $4.06
- Parks, director 24,586 at $4.06
- Raffaeli, director 12,293 at $4.06
- Lilien, acting CEO 7,376 at $4.06
- Weaver, director 68,843 at $4.06
- Brewster, director 24,586 at $4.06
- Willard, director 11,942 at $3.98 and 13,058 at $3.99
"And for them to be buying after a one-month triple digit move speaks volumes on confidence, which may explain the latest surge in option volume. Sure, the stock took a major dive in 2007, but that's because it got itself involved in a business it shouldn't have been in -- subprime.
"Fortunately, as highlighted by insider moves, there's a good chance the bad news has been factored in. Yes, they posted a loss after a $2.2 billion charge related to the sale of the asset-backed securities portfolio, but the company also unveiled a turnaround plan that could return the company to profitability this year.
"Better still, bullish moves have already been made by the company. In November 2007, for instance, the company sold a part of their mortgage portfolio to Citadel Investment, and secured $2.55 billion cash infusion.
"Plus, it's exiting its institutional trading business, which means it'll have more time to focus on retail banking and brokerage operations -- something it should have been doing all along.
"As for potential upside, a near-term fill of the $8 gap isn't out of the question, considering low valuations and attempts at a turnaround. Or, if you prefer options, buy the ETFC July 2008 5 call (EUSGA) up to $1.50."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
2-04-2008 @ 8:39AM
Barry Deen said...
Nice Post! For many of us this new stock price for E*Trade has been a blessing; what a great opportunity to buy a great company. The directors should know better than all of us where this company is going; let's just hope the stock follows suit.
Barry
http://www.buffettjr.com
2-04-2008 @ 11:19AM
Nino Pavkovic said...
The amount out stock these guys are buying (directors) is a joke. This is a "teaser" move to show that "insdiers" have confidence and are buying. The most $$ spent is $250K to buy 68K shares. It's a joke to think these guys have confidence. They're just teasing.
Now, if one of them put up 1M purchase, then it would get my attention.
2-04-2008 @ 12:19PM
john heisel said...
Layton, director 245,800 at $4.06
That is about a million bucks right there, Nina.
2-05-2008 @ 4:17PM
Jay said...
If it's that hard to count for you, what the hell are you doing trading stocks?
2-05-2008 @ 12:58AM
Chuck said...
LOL. Maybe Nina's lack of response is in itself a response, right? Comical. The silence is deafening. How's that crow?