legmaker

When Bank of Hawaii Falls Below 52-Week Low, It's Time to Buy

Hello everyone,
Just so everyone know's I bought in the money puts Friday and I will tell you why. Although I love this name long term and also believe $20 is a great place to buy this stock, I am unsure if a PE valuation is a good way to trade or invest in this name. Since financials are more of a trading prospect right now, I could either win big or lose big on Monday. Here are the reasons I bought puts and my comments will mimic many of those who wrote comments on this stock.
1. 16% of this state's economy is tourism. Since a trip to Hawaii is much more expensive than that of Mexico, even those with a little extra cash are probably going some place much less expensive.
2. 18% of their economy is real estate. When checking the numbers this state has held much better than others with respect to price, but prices are still down 3.6% to date. Since many people were using their homes as ATMs they will still see quite a bit of of problems in their market.
3. The most important is the forecast of unemployment which is still good, has it increasing 1.3% year over year, to 3.9%.
4. visitor arrivals down 10.6% yoy.
5. reall personal income down .3%
6. CPI up 4.6%.

With their total securities portfolio at $2.9 billion, 40% is with the Federal National Mortgage Assoc. and 29% with the Federal Home Loan Mortgage corp. As of 9-30-08 they had a total of $6.539 billion in home loans and leases with a loss provision of $115 million.
This company looks much better than many financials, including regionals, but may be a bit pricey. I didn't buy puts because I thought BOH was going to have a horrible quarter, I just think the stock is priced for perfection, and unless they beat by quite a bit will trend down after earnings. Have a great day and God Bless.