Buying BB&T on the Dip

I silently promised the CEO of BB&T (even if he is retiring at end of the year) to buy on a dip, thanks to his telling the truth on this bailout. [Sep 30: BB&T CEO Slams Bailout Bill].

The stock is down on this pullback in the market, so we're starting a stake below $37. We will begin with a 2.2% stake. I also added to PNC Financial (PNC) in the $74s.

So now we own 3 regional banks, 2 larger, one smaller. This group is cheaper than the JPMorgan (JPM), Wells Fargo (WFC) types, but those companies have promised they will have accreditive earnings from their new acquisitions so it is hard to compare future PE ratios right now until we see how much truth is in that. It does want to make one to strike one's head against the wall that people are rushing into JPMorgan at 25x 2008 earnings and don't want other stocks with double to triple the growth rates at 5x earnings... amazing.

Disclosure: Long PNC Financial, BB&T in fund; no personal position

Comments

[NOWHEREMAN:]

I fully understand why you don't have any exposure to BBT, but why would anyone be willing to risk their money when you won't.

2008 Oct 04 08:49 AM

[Mr Ed:]

BBT is a solid bank, how ever it is trading near 5 yr highs. STI for example is trading around $ 54 down from its high of $ 95 area. They have a great foot print and a large deposit base which is demand today plus the TARP will he be a help here . This bank will be bot out as they have regained descent footing now and have such a great foot print,if not they stand to gain as more banks fall into stronger hands.

2008 Oct 04 09:14 AM

[nyka:]

Mr. Ed (Drop the "Mr" .., please; it's slimy). Note that however is one word, not two.
What does "which is demand" mean. This bank will be what? Bot out? What does "bot" mean? Try bought. "Descent footing?" Do you mean DECENT footing? You need to work on your spelling. Otherwise, no one will take you seriously. At this point, your credibility level is minus zero.

2008 Oct 04 07:33 PM

[BlueOkie:]

A exit strategy is good advice in any market especially this one

2008 Oct 05 08:05 AM

[300mph:]

nyka, rua syntax snob?

2008 Oct 05 11:54 AM