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geodan85

geodan85
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  • Bank Of America: Capital Concerns Driving Share Price Down [View article]
    What I find ironic is the estimated capital shortfall mentioned in article (if it comes to pass) is almost equivalent to what the bank has paid out in legal settlements, mostly for Countrywide which will be a case study example of the worst acquisition ever made in financial services (nice job Ken Lewis).

    Backing out of the Merrill deal by Lewis was not allowed by Fed and Treasury. However, Merrill Lynch Wealth Management was contributing the only real profits the bank was making in the early years coming out of the 2008 meltdown and has been a good acquisition for the Bank America which I believe they will never sell. Bank America Merrill Lynch, the investment bank, may be something they eventually sell, although it seems unlikely if they want that universal global bank status.

    Finally, the bank has too many shares outstanding (over 10 billion) and many were issued during the crisis at lower prices, therefore dilutive. Any sustainable rally in the share price will require heavy lifting and meaningful change in profitability to support higher share price levels and perceived capital needs going forward, which at this point seems elusive for the very average management team this bank has. Currently, dead money seems to be a good description for BAC, although as one comment said a move back toward $17.00 wouldn't be a major surprise and would represent an adequate return, providing you sell the shares if the move materializes.
    Mar 24, 2015. 05:05 PM | Likes Like |Link to Comment
  • Bank Of America: Why The Stock Just Got Hammered [View article]
    and getting worse.
    Mar 23, 2015. 10:14 AM | Likes Like |Link to Comment
  • BofA rainmaker returns after a year at Goldman [View news story]
    Montag is ex-Goldman Sachs, the force must still hold sway, anything to help the Deathstar. He likely still has stock in Goldman.
    Feb 3, 2015. 02:53 PM | Likes Like |Link to Comment
  • Bank Of America - New Preferred Stock Issuance [View article]
    Boosting tier one equity. I believe non-cumulative perpetual preferred counts as equity. B of A really can't issue more common with over 10.0 billion already outstanding. The question is, does this issue indicate another large settlement of a lawsuit is coming? Or a large write down on some illiquid assets?
    Jan 22, 2015. 08:22 AM | 1 Like Like |Link to Comment
  • Bank Of America - New Preferred Stock Issuance [View article]
    I believe Moynihan also said that most of the energy loans were to big well known diversified companies, so risk of default will be lower.
    Jan 22, 2015. 08:10 AM | Likes Like |Link to Comment
  • Oil Tankers - The Brightest Spot In The Gloomy Energy Sector [View article]
    Streetwise, I agree, their financial statements are straight forward and very easy to understand which is welcome given how complicated some reports can be.

    The dividend announced yesterday of $.22 is a little disappointing, but if they are paying down debt, it is probably prudent.

    I am tired of this company issuing shares every time the share rallies. The real test for future share price appreciation will be if CEO Hansen can refrain from another secondary when the price enters into the teens. If he can, and the day rates hold, you can the make the case NAT can trade toward $20.00.
    Jan 9, 2015. 10:10 AM | 2 Likes Like |Link to Comment
  • Bank Of America: Breaking Up Is Hard To Do [View article]
    BAC should not be broken up. It is still digesting (more like indigestion) Countrywide and Merrill with settling lawsuits caused by their (Merrill and Countrywide) bad behavior (one reason BAC doesn't get Wells valuation).

    Isn't higher capital a good thing, especially when you factor in derivatives? Sure, higher ROE/ROA will be tougher to achieve, but the balance sheet will be stronger and dividends (as mention by a another commenter) should be allowed to increase further (a main reason to buy bank stocks).

    An argument to allow U.S. banks to become universal mega banks at the end of the last century was to compete better against foreign banks that have always had the universal model. This hasn't changed and doesn't appear to be on the docket in other countries, so any forced reduction in size could hurt the U.S. mega banks when dealing internationally where size matters especially for counterparty risk.

    Finally, didn't Goldman call for the break-up of J. P. Morgan Chase? That in itself should be questioned since they were ground zero for triggering the crisis in 2008 with their dealings with AIG. I would never trust Goldman Sachs advice on their competition since they are the most self serving firm on Wall Street and in my opinion do not provide recommendations that are independent of their own self interests.
    Jan 8, 2015. 09:37 AM | Likes Like |Link to Comment
  • My Failure With Peabody Which Has Become A Speculative Position [View article]
    Stocks always go lower then expected when you hold and believe the worst has past.

    I doubt BTU will be put into bankruptcy and I don't agree with the 50% probability assigned in this article. Peabody is a takeover target at these price levels and any buyer would have likely have to pay well above $12.00 per share, if normalized valuations are used and coal isn't dead as an energy source (any potential buyer would not believe coal is dead). Also, any takeover would not be easy for a foreign multi-national given Peabody's position in the U.S. and the fact that most of the PBR basin is federal land.

    If BTU and all coal stocks don't rally early next year (institutional year end selling has crushed the sector) takeover/consolidation talk, I believe, will begin to become more evident. Of course, any takeover talk will help the stock and sector rally, therefore this sector looks like a decent long trade into Q1 next year.

    If the losses for most investors in this stock weren't so severe, the article linked below would be funny. The article/award is from earlier this month, clearly no shareholders were consulted.


    http://yhoo.it/1xcwRTI
    Dec 29, 2014. 02:43 PM | Likes Like |Link to Comment
  • Update: Seadrill Q3'14 Earnings And Dividend Suspension [View article]
    They need to roll over debt next year, hence the dividend suspension to please creditors and bond market.


    The question is, will the lower re-pricing occurring in the oil sector be sustained or even push lower? If so, certain drilling isn't as profitable, so day rates will need to adjust lower as well. Seadrill is anticipating lower prices and will pay down some debt to lower their cost basis.

    Best you can say is stock will be dead money for awhile, along with whole sector.
    Nov 27, 2014. 03:42 PM | 1 Like Like |Link to Comment
  • Peabody Energy's Attempt To Get Coal Back On The Agenda: Not Successful [View article]
    Coal will never go away despite the wish by green environmentalists. This article would be better published in a Sierra Club newsletter rather then on an investment information website.

    It is almost comical to say "Peabody's attempt to get coal back on the agenda: not successful" Says who? The author, as far as I can see he has nothing to do with Peabody and clearly isn't privy to internal discussions within the company. I think it safe to say that Peabody will ALWAYS advocate coal and NEVER stop promoting the use as an energy source.

    Finally, was coal really off the agenda? I think not, so the whole article is based on false pretenses.
    Nov 20, 2014. 05:29 PM | 4 Likes Like |Link to Comment
  • Bank Of America: Buy Before Everyone Else Does [View article]
    MER was trading in the $90s at the time, talk was $110 to $120, it was January of 2007.
    Sep 12, 2014. 09:53 AM | Likes Like |Link to Comment
  • Bank Of America: Buy Before Everyone Else Does [View article]
    Merrill Lynch Wealth Management was the most profitable private client operation in the world, hopefully B of A doesn't change that, although I know it has changed (first hand knowledge), with regard to management, since the takeover.

    The book "All The devils are here" is a must read for all investors, especially B of A investors since it gives a very thorough description of the financial crisis and devotes two chapters on what happened inside Merrill and Countrywide. Merrill was destroyed by an incompetent CEO, Stan O' Neil, who refused to take advice of experienced traders and risk managers. Countrywide lost their way and like Merrill pushed aside executives who wanted to stop the madness when the signs of the eventual problems began to arise.

    One last observation, after you read the book it is obvious the total U.S. economy was on steroids of free and easy credit of amounts never seen before and certainly never to be seen again. Therefore, all the talk we hear about disappointing economic recovery is a little misleading since any comparison to the economy prior to 2007/2008 is always going to be disappointing when compared to that artificial high.

    However, there is a recovery, albeit not nearly good enough for many people, and given the level of interest rates, it should continue at subpar levels. The key, at least to me, is when QE ends next month will be the level of free reserves in the banking system (link below) which have been growing continuously as QE occurred. If the level of free reserves begins to decline as QE ends, it will be an offset to QE ending and should provide liquidity/credit to the economy and be good for the banking sector's earnings as they lend at better credit spreads. Inflation may begin to rise as a result of a decline of the free reserves, but that will is another discussion.

    http://1.usa.gov/WFIQZQ
    Sep 11, 2014. 09:42 AM | 5 Likes Like |Link to Comment
  • Peabody Energy Corporation CEO Says Coal Is Still On Top, But Is It? [View article]
    All your points essentially are political and represent the liberal/left/environme... view. That's fine, but when investing economics matter as well. Coal is a cheap abundant source of energy with the United States having some of the largest reserves in the world. This is an asset that will be used despite the current administration's disregard (and attack) for anything fossil fuel related that would help the U.S. in trade and/or competitive advantages for industries based on the North American continent.

    Presidents and their appointees change, thankfully, and when the current harmful crew (harmful to our economy, international standing, rule of law to name a few, but not all) leaves, coal will recover and Peabody's stock will be higher.
    Aug 20, 2014. 07:41 AM | 16 Likes Like |Link to Comment
  • Merrill Lynch And Countrywide Financial: Huge Thorns In The Side Of Bank Of America [View article]
    John Thain was not the reason Merrill imploded. The guilty idiot that destroyed Merrill forcing ultimately the Bank America acquisition was Stan O'Neal, he is the former CEO to blame for Merrill's demise. Thain, actually made the best (for Merrill shareholders) of a very bad situation he inherited from O'Neal.
    Aug 3, 2014. 12:25 PM | 1 Like Like |Link to Comment
  • Bank Of America's Insider Activity Is Puzzling [View article]
    There are blackout periods (certainly around the quarterly earnings report) where no buying or selling can take place in a company's stock for certain high level executives. Also, and more importantly, executives at BAC/Merrill get restricted stock (options were done away with years ago for most) EVERY year as part of their VICP ward (variable incentive compensation plan) with three year vesting schedules. Why would any of these executives buy more in the open market when they get it every year? As it vests over the three year period, it is very common for the stock to be sold for liquidity or diversification reasons (claw backs as well aka forfietures). Finally, BAC has over 10 billion shares outstanding, so the amount held by the so called insiders is small and has no impact on price. Looking at insider buying/selling on banks/investment banks is almost useless.
    May 23, 2014. 12:27 PM | 3 Likes Like |Link to Comment
COMMENTS STATS
174 Comments
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