Stealth buying intensifies as 54 new institutional investors quietly acquire shares of Washington Mutual (WM), according to NASDAQ Detailed Institutional Holdings. That’s an astounding 567 institutional investors now holding 52% of the company. Toscafund Asset Management LLP, a British based value player, reportedly snatched up 105.5 million shares, or a 6% interest. Spotting stealth activity requires painstaking analysis. The majority of investors fail to recognize stealth activity until it’s publicly disclosed. The wholesale accumulation of WaMu shares trumpets a clear “Buy Signal.”
WaMu used this past quarter to come clean, cleanse the books, or as Howard Shapiro of Fox-Pitt Kellton put it, “move ahead of the curve on credit, having charged off or provided for 65 % of it expected loss exposure.” WaMu added over 17 billion dollars of fresh capital, enhancing the balance sheet with 50 billion dollars of liquidity. This was not done out of necessity, but more in a sense to silence the mouths of its adversaries that are mostly short sellers that traffic in fear, terror, false rumors, and manipulation.
WaMu’s house keeping has positioned the company to report better than expected results in the next quarter. This will no doubt come as an overwhelming surprise to those that have been seduced by short sellers, but nevertheless, it’s going to be an eventful day. To say that short sellers will be caught unaware is understating the reality of a panic short-cover rally.
The undeniable facts are plain to see. The intensification of stealth buying will only continue. Short sellers can and will lie about the figures, but the figures do not lie. They are undisputable. We, like so many others, could not help but call WaMu an attractive buy at this level.
Disclosure: Author holds a long position in WM