dcxavier

How To Buy a Bank (and Other Beaten-Down Stocks)

About WM. Sure they were $2.6B cash flow positive, but $2B of it came from a $1B preferred issuance plus another $1B bond offering. Not exactly sustainable. Go to pages WM-14 and WM-15 of the 8-K with the latest earnings release and see how NPA and actual writeoffs are ramping out of control, especially the HELOC. And if you think that $327B in assets, including $50B face value of HELOC is still worth $327B, then I have a bridge in Brooklyn to sell you. There's a reason they took $7B in cash, it was to maintain Tier 1 capital and prevent insolvency. If housing price keep fall another 10-20% in CA, AZ and FL, the $7B won't be enough.