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JPMorgan to Buy Rest of Cazenove – Analyst Blog

Zacks Market Commentaries — Tue, 17 Nov 2009 16:44:08 +0000

JPMorgan Chase & Company (JPM) is in discussions to take full control of its U.K. joint-venture partner, Cazenove Group, for about £1 billion ($1.7 billion).

JPMorgan entered into a partnership with Cazenove five years ago. At that time, JPMorgan paid about £100 million for a 50% ownership in Cazenove.

Now, JPMorgan intends to buy the remaining 50% of the investment-banking partnership for 500−525 pence per share.

Chief Executive Naguib Kheraj, the former finance chief of Barclays PLC (BCS) is running JPMorgan Cazenove since last year. Cazenove first became one of London's leading stockbrokers in the mid-1930s.

Deciding on the full acquisition of Cazenove has been crucial for Jamie Dimon, CEO of JPMorgan. Dimon organized a similar purchase of the bank’s remaining stake in Highbridge Capital Management this year.

In the last few years, JPMorgan has been able to maintain its top position in global investment banking. The company also emerged from the financial crisis stronger than many of its peers such as Bank of America Corporation (BAC), Wells Fargo & Company (WFC) and US Bancorp (USB).

We think that JPMorgan is in a relatively good shape from a capital perspective. We expect the company’s capital position to be a major differentiator going forward vis-à-vis its peers as it implies lower risk of additional capital raises and more opportunity for market share gains. Also, in the second quarter of 2009, the company repaid the entire $25 billion in preferred capital received as part of the Troubled Asset Relief Program (TARP).

We anticipate continued synergies from the company’s diversification and strong capital position, but increasing provisions and worsening credit quality will be a drag on upcoming results.

Read the full analyst report on "JPM"
Read the full analyst report on "BCS"
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Zacks Investment Research

Zacks Analyst Blog Highlights: Nordstrom Inc., Abercrombie & Fitch Co., The Walt Disney Company, Wells Fargo & Company and Bank of America Corporation – Press Releases

Zacks Market Commentaries — Mon, 16 Nov 2009 13:02:58 +0000

For Immediate Release

Chicago, IL – November 16, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Nordstrom Inc. (JWN), Abercrombie & Fitch Co. (ANF), The Walt Disney Company (DIS), Wells Fargo & Company (WFC) and Bank of America Corporation (BAC).

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Here are highlights from Friday’s Analyst Blog:

Nordstrom Ups Guidance, Post-Beat

High-end retailer Nordstrom Inc. (JWN) has reported strong third quarter 2009 results with net income of $83 million or 38 cents per share compared to $71 million or 33 cents per share in the year-earlier quarter. The earnings marginally beat the Zacks Consensus Estimate by a penny.

The year-over-year increase in earnings was primarily due to an improvement in same-store sales in each month of the quarter through prudent inventory management policies that focused on sales trends. Quarter-end inventory per square foot declined 10.7% versus the year-ago period. Overall gross profit of the company (as a percentage of sales) increased approximately 90 bps during the quarter compared to the year-earlier quarter.

By segment, same-store sales decreased 4.2% during the quarter in Full-line stores, increased 16.4% in Nordstrom Direct and 3.0% in Nordstrom Rack. During the quarter, the company reported a $10 million increase in retail selling, general and administrative expenses due to an increase in operating costs related to the opening of new stores, along with an increase in variable expenses.

Abercrombie & Fitch Earnings Dip

Abercrombie & Fitch Co. (ANF), a leading international specialty retailer, reported relatively weak third quarter 2009 results with a net income of $38.8 million or 44 cents per share, compared to a net income of $63.9 million or 72 cents per share in the year-earlier quarter.

The year-over-year decline in results was primarily due to the continued economic downturn plaguing the industry that has resulted in reduced consumer discretionary income and cuts in non-essential spending.

Overall net sales of the company during the quarter decreased 15% to $765.4 million from $896.3 million in the year-ago quarter. Total company direct-to-consumer net sales increased 11% year-over-year to $63.9 million, while overall comparable-store sales decreased 22%.

Disney’s Revenue Climbs

The Walt Disney Company (DIS) recently reported fourth-quarter 2009 results, posting mid-single digit growth in both top and bottom lines. Total revenue for the quarter climbed 4% year-on-year to $9,867 million.

The quarterly earnings of 46 cents a share outdid the Zacks Consensus Estimate of 41 cents and jumped 5% from 44 cents delivered in the prior-year quarter. The better-than-expected results followed strong results from its Media Networks segment and effective cost management.

On a reported basis, including one-time items, quarterly earnings came in at 47 cents a share, up 18% from 40 cents posted in the year-ago quarter.

New Rules for Bank Overdraft Fees

According to the new regulations, consumers must be given a notice explaining a financial institution's overdraft services, including an explanation of the fees associated with the services.

The Federal Reserve took this decision primarily based on its investigation which showed that banking customers only want overdraft services if they know the details of what is required. However, some consumers do want overdraft protection services to make sure that some time-sensitive payments like rent and bills are covered, as long as they know the charges.

The Fed's rules appear mostly in line with the new trend that some of the banks have already begun moving toward. In September, Wells Fargo & Company (WFC) said that it will not charge fees from customers if they overdraw their accounts by $5 or less. Following that, in October, Bank of America Corporation (BAC) announced that it will eliminate fees if a customer’s account is overdrawn by less than $10 in a single day.

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New Rules for Bank Overdraft Fees – Analyst Blog

Zacks Market Commentaries — Fri, 13 Nov 2009 14:01:43 +0000

On Thursday, the Federal Reserve finally announced rules that will prohibit banks from charging overdraft fees at ATMs and one-time debit card transactions without the consent of customers.

The rules, which will be effective July 1, 2010, appear in response to growing consumer dissatisfaction with the overdraft charges that they often do not realize until they receive their monthly statement. Banks previously added overdraft protection automatically to most accounts regardless of the amount that was withdrawn.

According to the new regulations, consumers must be given a notice explaining a financial institution's overdraft services, including an explanation of the fees associated with the services.

The Federal Reserve took this decision primarily based on its investigation which showed that banking customers only want overdraft services if they know the details of what is required. However, some consumers do want overdraft protection services to make sure that some time-sensitive payments like rent and bills are covered, as long as they know the charges.

The Fed's rules appear mostly in line with the new trend that some of the banks have already begun moving toward. In September, Wells Fargo & Company (WFC) said that it will not charge fees from customers if they overdraw their accounts by $5 or less. Following that, in October, Bank of America Corporation (BAC) announced that it will eliminate fees if a customer’s account is overdrawn by less than $10 in a single day.

Congress wants stricter rules going forward. Very soon, the Senate Banking Committee will discuss legislation that would go further than the current overdraft fees rules. We will keep an eye on this.
Read the full analyst report on "WFC"
Read the full analyst report on "BAC"
Zacks Investment Research

Senior Notes from Dollar Fin – Analyst Blog

Zacks Market Commentaries — Fri, 13 Nov 2009 06:00:13 +0000

Dollar Financial Corporation (DLLR) said on Wednesday that it intends to offer $250 million aggregate principal amount of senior notes in a private offering through its indirect wholly owned subsidiary National Money Mart Company.

The senior notes will be guaranteed on an unsecured basis by Dollar Financial and some of its current and future direct and indirect wholly owned U.S. and Canadian subsidiaries. The company intends to use net proceeds from the senior notes offering to finance the acquisition of Military Financial Services, LLC by its wholly owned subsidiary, Dollar Financial Group, Inc.

The senior notes offering, which the company expects to start and close in Dec 2009, will be available only to qualified institutional buyers and certain offshore investors.

Concurrent with the senior notes offering, the company said on the same day that it is seeking an amendment and extension of the terms for its revolving credit facilities along with its $286.2 million of Canadian term loans and $83.5 million in British term loans. The amendment would allow the extension of the maturity dates of a portion of Dollar's credit facilities to December 2014.

Credit Suisse Securities (USA), LLC, a division of Credit Suisse Group (CS) and Wells Fargo Bank, National Association, a division of Wells Fargo & Company (WFC) will take part in this amendment and extension transaction as Joint Lead Arrangers and Joint Book Runners.

We think that both the senior notes offering and amendment of revolving credit facilities will increase the company’s financial flexibility. As a result, the company will be able to continue to further expand its global footprint and diversified business model.

We remain concerned about the risks related to Dollar Financial’s tax strategies, extremely fragmented nature of business and international dependence. However, a solid liquidity position, exposure to a somewhat recession-proof sector and cost containment measures will drive future growth.

Read the full analyst report on "DLLR"
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NutraCea Files for Bankruptcy – Analyst Blog

Zacks Market Commentaries — Thu, 12 Nov 2009 22:57:20 +0000

Phoenix-based NutraCea (NTRZ), a producer of stabilized rice bran and other baby cereals, had filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The petition was filed in the U.S. Bankruptcy Court for the District of Arizona on Nov 10.

The world leader in stabilized rice bran nutrient research and technology plans to restructure its operations with government aid. Pursuant to the bankruptcy code, the company will reshuffle its operations, trim overhead costs and dispose of non-core assets, while focusing on its core business of stabilized rice bran, rice bran oil, nutraceuticals and baby cereals. None of the company’s subsidiaries were party to the bankruptcy filing.

Concurrent with the bankruptcy filing, the company applied for $6.8 million of loan from Wells Fargo Bank, a division of Wells Fargo & Company (WFC). This loan, along with the cash generated from operations, will help the company to make wages payment and return to its normal day-to-day operations. NutraCea already has a loan of $3.6 million from Wells Fargo Bank.

On Oct 23, NutraCea filed restated financial statements for 2006, 2007 and the first three quarters of 2008. The company reported a net loss of $64.5 million for fiscal 2008, compared to a net loss of $18.0 million for fiscal 2007. The company has experienced recurring losses and negative cash flows from operations. NutraCea is lagging in its payments to vendors and has defaulted on several agreements due to nonpayment.

Expenses have been reduced wherever possible. In the past, the company has turned to the equity markets for additional liquidity. However, this is not a likely source of funds at this point of time due to the company’s financial position and the state of the equity markets.
Read the full analyst report on "NTRZ"
Zacks Investment Research

TAXS, SCHW, PSFT, DISH, PWRM, MMM, CSRH, WFC, CVAT, JPM, AQNM, DrStockPick.com Stock Report!

Dr. Stock Pick — Tue, 27 Oct 2009 19:36:08 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Tuesday October 27, 2009 DrStockPick.com Stock Report! TAXS, SCHW, PSFT, DISH, PWRM, MMM, CSRH, WFC, CVAT, JPM, AQNM ************************************************************** TAXS, TaxMasters Inc., TAXS.OB TAXS‘ commitment to helping taxpayers in the United States regain compliance with The Internal Revenue Service IRS. TAXS finalized plans this week to take advantage of the [...]

Wells Cedes $75M Facility to Marlin – Analyst Blog

Zacks Market Commentaries — Thu, 15 Oct 2009 15:30:00 +0000

Wells Fargo & Company (WFC) rendered a $75 million 3-year committed funding facility to Marlin Receivables Corp., an affiliate of Marlin Business Services Corp. (MRLN). Marlin Receivables intends to use the facility fund its growth, with an aim to extend increased flexible equipment financing options to numerous small and medium-sized businesses nationwide.

Marlin Business and Wells Fargo have had similar commitments in the past as well. The continued relation will benefit Marlin as it will bolster its financing base, thereby readily meeting the needs of many small businesses. Wells Fargo is the fourth largest financial services company in the U.S. (in terms of assets) with $1.3 trillion in assets and over $800 million in deposits.

The company provides retail and wholesale banking, mortgage banking, consumer finance, equipment leasing, insurance brokerage, agricultural finance, securities brokerage, trust, investment banking and other financial services through banking stores, the Internet and other distribution channels to individuals, businesses and institutions in all 50 states, the District of Columbia (D.C.) and in other countries.

We think that Wells Fargo is relatively well positioned compared to its peers as it benefited from a larger share in the mortgage markets after acquiring Wachovia as well as from the demise of some smaller players. However, higher credit losses resulting from a continued deterioration in the housing markets will impact earnings in the coming quarters. As such, we are maintaining our Neutral recommendation on the shares.
Read the full analyst report on "WFC"
Read the full analyst report on "MRLN"
Zacks Investment Research

PFE, PWRM, CSRH, MRK, CVAT, WFC, AQNM, WMT, DrStockPick.com Stock Report!

Dr. Stock Pick — Wed, 14 Oct 2009 17:59:32 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday October 14, 2009 DrStockPick.com Stock Report! PFE, PWRM, CSRH, MRK, CVAT, WFC, AQNM, WMT ************************************************************** PFE, Pfizer Inc. PFE engages in the discovery, development, manufacture, and marketing of prescription medicines for humans and animals worldwide. PFE’s s $68 billion purchase of Wyeth will close Thursday after antitrust regulators in [...]

Citi Frames New Advisory Model – Analyst Blog

Zacks Market Commentaries — Wed, 07 Oct 2009 16:45:46 +0000

Citigroup Inc. (C) is planning a strategic shift in its investment advisory business by bringing qualified advisors from Citibank branches to provide fee-only investment advisory services instead of commission-based transactions.

The new strategy will give clients who want wealth management services through Citibank branches the option of working with Citi's own financial advisers, or of choosing external independent advisers with whom Citi will begin to form relationships, and who will pay Citi a referral fee.

Citigroup has a relatively small branch network and is starting off with a small brokerage. Citigroup is starting the business with 600 advisers who sit in 1,000 Citibank branches in the United States . Citi plans to eliminate all commission-based compensation by 2011.

The changes are expected to be implemented next year. Apart from providing clients with more transparency, a smaller risk of conflicts of interest and wider geographical footprint, this move will have practical implications for Citi’s customers. Financial advisors levy fees based on the assets held by each customer while brokers charge commissions depending on the number and value of trades they execute and products they sell. Hence, the fee-based pricing structure would remove incentives for brokers to push specific products.

Through the new strategy, Citigroup is planning to manage clients’ overall financial portfolio apart from accepting deposits and giving out loans to them. To build up a network of trusted advisers, Citi will need to invest a good deal of time and effort.

Combining the two businesses will provide Citigroup the access to more of their client's finances, thereby potentially generating higher revenue. But several banks in the past have attempted to bring these two cultures to work together but have failed. Bank of America Corporation (BAC) and Wells Fargo & Company (WFC) have large U.S. retail bank branch networks, and large retail brokerages.

Last month, Citigroup indicated that the company will eventually divest its remaining stake in the Smith Barney joint venture with Morgan Stanley. Morgan Stanley paid $2.75 billion to Citigroup as part of the deal.

Citigroup will release its third quarter 2009 earnings on Oct 15, 2009 with a conference call scheduled later in the day to discuss its results. Ahead of its results, we maintain our Neutral recommendation on the stock.
Read the full analyst report on "C"
Read the full analyst report on "BAC"
Read the full analyst report on "WFC"
Zacks Investment Research

Ken Lewis Retiring from BofA – Analyst Blog

Zacks Market Commentaries — Thu, 01 Oct 2009 16:03:36 +0000

Ken Lewis, Chief Executive Officer and President of Bank of America Corporation (BAC), announced that he has notified the Board of Directors of his decision to retire, effective December 31, 2009.

The Board will continue ongoing planning to ensure his successor is selected by that date. Lewis will retire both as CEO and as a director.

On Aug. 3, 2009, Lewis, 62, had initiated changes to his executive management committee that increased the depth, expertise and diversity of experience of Bank of America's leadership team. Lewis had targeted these changes to position a number of senior executives to compete to succeed him at the appropriate time.

Lewis' decision to retire adds to the uncertainty for a company that has been under attack by regulators and lawmakers since its controversial purchase of Merrill Lynch a little more than a year ago.

The lack of a clear successor to replace Lewis, who has claimed a lot of the credit for transforming Bank of America into one of the biggest success stories in banking in recent years prior to the Merrill deal, raises concerns about the bank’s future.

There are also the various legal actions being taken against the firm related to the Merrill acquisition, including a securities fraud suit brought by the Securities and Exchange Commission that alleges the company misled investors about bonuses paid to Merrill Lynch employees.

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company serves clients in more than 150 countries. Major competitors are Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Wells Fargo & Company (WFC).

We currently have a Neutral recommendation on BAC.
Read the full analyst report on "BAC"
Read the full analyst report on "C"
Read the full analyst report on "JPM"
Read the full analyst report on "WFC"
Zacks Investment Research

Ken Lewis Retiring from BofA – Analyst Blog

Zacks Market Commentaries — Thu, 01 Oct 2009 16:03:36 +0000

Newsweek Ranks Wells Fargo Greenest Bank in U.S.

Dawn Van Zant — Fri, 25 Sep 2009 13:00:00 +0000

SAN FRANCISCO - September 25, 2009 - Wells Fargo Company (NYSE:WFC) announced today that it ranks number one among banks and insurance companies - and thirteenth overall - in Newsweek magazine's inaugural Green Rankings of the country's 500-largest companies.

Wells Fargo Widens Remittance Ambit – Analyst Blog

Zacks Market Commentaries — Thu, 10 Sep 2009 20:30:09 +0000

Wells Fargo & Company (WFC) announced the expansion of its money transfer program to the Internet, making it easier for customers to send money to family members living in Mexico, India and other South Asian countries.

The ExpressSend remittance service was introduced in 2007 at the bank's branches and over the phone.

The transferred money can be collected from the branches of specified overseas banks and at their automated teller machines. Customers using the service online will continue to receive detailed information on how and where the money is being sent including the associated fee, the foreign exchange rate and the foreign exchange margin. The margin is the estimated revenue the bank earns on the conversion.

Wells Fargo said transaction fees will be discounted or even waived for customers sending money from eligible Wells Fargo checking and savings accounts. Money through the new service will arrive in Mexico, El Salvador and Guatemala on the same day it is sent and on the next business day in China, India, Vietnam and the Philippines.

The expansion will fulfill customers’ desire for anytime, anywhere banking, providing them with the flexibility and convenience of conducting their financial transactions whenever they want.

Wells Fargo reported second quarter net income of 57 cents per share. The company reported that the Wachovia merger is on track and expects to realize $5 billion of annual merger-related savings upon completion of the integration. During the latest reported quarter, 39% of the combined revenue came from Wachovia. With the combined resources, Wells Fargo will be in an even better position to satisfy its customers’ financial needs.

We maintain a Neutral recommendation on the shares of Wells Fargo.
Read the full analyst report on "WFC"
Zacks Investment Research

Wells Fargo, BofA Revamp Loan Rates – Analyst Blog

Zacks Market Commentaries — Thu, 10 Sep 2009 19:00:16 +0000

Wells Fargo & Company (WFC) and Bank of America Corporation (BAC) showed impressive improvements in their loan-modification rates in August 2009 after experiencing poor rates in July 2009.

However, both Wells Fargo and Bank of America still remain way behind their competitors such as JP Morgan Chase & Co. (JPM), but both have ramped up refinancing efforts significantly.

Wells loan-modification rates increased 64%, completing 33,172 modifications under the Home Affordable Modification Program (HAMP) by the end of August. On the other hand, Bank of America more than doubled its loan-modification rates, completing 59,891 modifications. HAMP is a Government-sponsored program that aims at helping people who can no longer afford to make their monthly mortgage payments.

Wells Fargo expects to exceed its goal under the program, which is about 60,000 modifications. The company has modified 251,244 home loans using its own programs, bringing the total number of modifications or trial modifications started or completed year-to-date to 284,416.

Bank of America extended offers to 15% of borrowers that were eligible for HAMP. Wells Fargo extended offers to 25% and assisted 12%. Wachovia offered to help 3% of its eligible mortgages, and began to modify 2%. JP Morgan continues to top loan-modification program as it has offered to help 33% of borrowers and completed modifications for 25% whereas Citigroup Inc. (C) extended offers to 31% and helped 23%.

These companies are striving hard to work out troubled loans because it helps them as well as taxpayers, customers and investors as foreclosures bring losses to all of them.

However, despite the improvements in the modification rates and the upsurge of refinancing activity across the country, concerns regarding the rising tide of delinquencies, defaults and foreclosures have not yet alleviated. Fitch Ratings released a report this week citing more danger from a large amount of risky mortgages called Option-ARMs, that are about to reset at higher rates.

Furthermore, Standard & Poor's (S&P) warned that credit card losses will escalate again as the economy continues to shed thousands of jobs every month with the unemployment rate at a 26-year high of 9.7% in August 2009. S&P expects credit card loss rates to rise to a range of 10.5% to 13% based on its assumption that the unemployment rate would rise to the range of 10.4% to 12.7% and will remain in that range for the next 1–2 years.
Read the full analyst report on "WFC"
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Zacks Investment Research

Stock-PR NYSE Stock Headlines September 9, 2009

Stock-PR — Wed, 09 Sep 2009 16:51:24 +0000

After years of quietly building what has become the largest renewable energy business in the nation, FPL Group, Inc. (NYSE:FPL) has established itself as one of the nation’s cleanest electric power providers. More than anything else, this defines the company’s commitment to sustainable business practices. FPL Group, Inc. (NYSE: FPL) is a leading clean energy company [...]

PennyOmega.com Stock Report! 9/09/09, CNAM, WFC, HGG, QASP, NICK, MPS

PennyOmega.com — Wed, 09 Sep 2009 15:35:45 +0000

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Wells Fargo Looks for TARP Exit – Analyst Blog

Zacks Market Commentaries — Wed, 02 Sep 2009 14:01:45 +0000

On Tuesday, Wells Fargo & Company (WFC) announced its plans to repay government bailout money in the near future without raising fresh capital, in order to protect shareholders’ interest.

Wells Fargo remains confident that it will be able to generate the capital internally through better earnings performance in the upcoming quarters. Hence, it does not intend to raise new equity capital and dilute the current shareholders’ interest to exit the Troubled Asset Relief Program (TARP).

Wells Fargo did not mention the time period for exiting TARP, but mentioned that it will work closely with regulators to determine the appropriate time to repay the funds while maintaining strong capital levels.

In October 2008, the U.S. government injected more than $100 billion in the nation's 9 largest banks through TARP, with Wells Fargo getting $25 billion. Government stress tests conducted in May concluded that Wells Fargo needed almost $14 billion in fresh equity capital, among the highest for any bank involved in the industry bailouts.

Though many banks have repaid TARP this year, Wells Fargo has yet to pay back the bailout money. Bank of America Corporation (BAC) has offered to repay $20 billion of its $45 billion in total government investment.

A number of banks, including Goldman Sachs Group Inc. (GS) and BB&T Corporation (BBT) have raised capital in recent months by issuing fresh common equity, a move that dilutes existing shareholders’ interest.

Wells Fargo’s second-quarter 2009 results indicated that its large exposure to California real estate has led to huge losses. Hence, an immediate capital raise might have allowed the company to repay TARP more swiftly and cover potential losses on its troublesome loan portfolio. However, Wells Fargo's refusal to raise more capital to protect its shareholders interest comes as a positive for the stock.

In view of the above, we are maintaining our Hold recommendation on the shares.
Read the full analyst report on "WFC"
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Read the full analyst report on "GS"
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Zacks Investment Research

PennyOmega.com Stock Report! 8/20/09, APNT, MLKNA, PBIB, ICE, WFC, SPNG

PennyOmega.com — Thu, 20 Aug 2009 17:15:15 +0000

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Zacks Analyst Blog Highlights: JPMorgan Chase, Wells Fargo & Company, Zions Bancorp, BB&T Corp. and Fifth Third Bancorp – Press Releases

Zacks Market Commentaries — Tue, 11 Aug 2009 13:10:14 +0000

For Immediate Release

Chicago, IL – August 11, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JPMorgan Chase (JPM), Wells Fargo & Company (WFC), Zions Bancorp (ZION), BB&T Corp. (BBT) and Fifth Third Bancorp (FITB).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Bank Shutdowns Continue

In the first quarter of 2009, the number of banks on the Federal Deposit Insurance Corporation’s (FDIC) list of problem institutions jumped to 305. This is the maximum number since the savings and loan crisis in 1994.

Out of the 3 banks, 2 were Florida based and the other one was Oregon based. The FDIC has appointed receivers of the banks. According to the FDIC, the cost to the deposit insurance fund from the failure of the three banks will be around $185 million.

The First State Bank, of Sarasota, Fla. and the Community National Bank of Sarasota County of Venice, Fla. were sold to Stearns Bank of St. Cloud, Minnesota. The Community First Bank of Prineville, Oregon was sold to Home Federal Bancorp of Nampa, Idaho.

Total assets and deposits of First State Bank, Community National Bank and Community First Bank were $463 million and $387 million, $97 million and $93 million, and $209 million and $182 million, respectively.

The largest acquirers of failed U.S. banks during 2008 and 2009 include JPMorgan Chase (JPM), Wells Fargo & Company (WFC), Zions Bancorp (ZION), BB&T Corp. (BBT) and Fifth Third Bancorp (FITB).

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Contact:
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312-265-9380
Visit: www.zacks.com

Zacks Investment Research

Bank Shutdowns Continue – Analyst Blog

Zacks Market Commentaries — Mon, 10 Aug 2009 15:44:02 +0000

Three more banks were shuttered by U.S. regulators on Friday. This brings the total number of failed federally insured banks during this year to 72, compared to 25 in 2008 and 3 in 2007.

In the first quarter of 2009, the number of banks on the Federal Deposit Insurance Corporation’s (FDIC) list of problem institutions jumped to 305. This is the maximum number since the savings and loan crisis in 1994.

Out of the 3 banks, 2 were Florida based and the other one was Oregon based. The FDIC has appointed receivers of the banks. According to the FDIC, the cost to the deposit insurance fund from the failure of the three banks will be around $185 million.

The First State Bank, of Sarasota, Fla. and the Community National Bank of Sarasota County of Venice, Fla. were sold to Stearns Bank of St. Cloud, Minnesota. The Community First Bank of Prineville, Oregon was sold to Home Federal Bancorp of Nampa, Idaho.

Total assets and deposits of First State Bank, Community National Bank and Community First Bank were $463 million and $387 million, $97 million and $93 million, and $209 million and $182 million, respectively.

The largest acquirers of failed U.S. banks during 2008 and 2009 include JPMorgan Chase (JPM), Wells Fargo & Company (WFC), Zions Bancorp (ZION), BB&T Corp. (BBT) and Fifth Third Bancorp (FITB).

The failed banks are victims of recession and rising loan losses. As a result of the ongoing market turmoil, these institutions experienced massive capital erosion stemming from losses due to significant exposure in collateralized mortgage obligations (CMOs), commercial real estate loans and other commercial and industrial loans.

The current year has been difficult for consumers to pay off debt as a result of high unemployment rate, falling home prices and declining personal wealth.

Though current signals indicate that the economy may stabilize losses on home mortgages in the near-term, we expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "JPM"
Read the full analyst report on "WFC"
Read the full analyst report on "ZION"
Read the full analyst report on "BBT"
Read the full analyst report on "FITB"
Zacks Investment Research

DrStockPick.com Stock Report! 8/06/09, CAL, IGT, MDT, MYL, WFC, MNRTA

Dr. Stock Pick — Thu, 06 Aug 2009 17:29:21 +0000

DrStockPick.com Stock Report! Thursday August 6, 2009 ************************************************************** Continental Airlines (NYSE: CAL) today announced new service from its Guam hub and Honolulu to Nadi, Fiji beginning Dec. 18, 2009. The flights will also offer convenient connections from the U.S. mainland, Japan and Continental’s Micronesian network to Nadi. Shalov Stone Bonner & Rocco LLP [...]

Wilmington Not a CAL Lender – Analyst Blog

Zacks Market Commentaries — Tue, 07 Jul 2009 16:43:08 +0000

Wilmington Trust is not a lender to Continental Airlines

In a filing with SEC on July 1, 2009, Continental Airlines Inc (CAL) unveiled an agreement with Wells Fargo & Company (WFC) and Wilmington Trust Corporation (WL) for aircraft financing. Continental intended to issue equipment notes to finance 12 Boeing aircraft it already owns and five of the seven Boeing planes that are scheduled for delivery through September.

However, On July 3, 2009, Wilmington Trust clarified that it is not a lender to Continental and has no credit exposure to the airline company. Wilmington is serving solely in corporate trust and agency capacities for Continental’s future issuance of approximately $390 million of equipment notes.

As a result, this transaction has no impact on Wilmington Trust’s financial condition. Wilmington Trust’s role remained restricted to serving as subordination agent, pass-through trustee, and indenture trustee, for which it has received a fee.

Wilmington is a mid-cap financial holding company whose primary subsidiary, Wilmington Trust Company, is a Delaware-chartered bank and trust company. Wilmington Trust has a very well-balanced revenue stream relative to most mid-cap peers (Webster Financial Corp [WBS], Valley National Bancorp [VLY] and Fulton Financial Corp [FULT]).

Moody’s downgraded the rating of the company in April 2009 based on concerns related to its real estate lending concentration and investments in bank trust preferred securities. Furthermore, recently, S&P lowered its outlook on Wilmington Trust to “negative" and also downgraded its ratings. As such, we maintain our Sell recommendation on the shares of Wilmington Trust.

Read the full analyst report on "CAL"
Read the full analyst report on "WFC"
Read the full analyst report on "WL"
Read the full analyst report on "WBS"
Read the full analyst report on "VLY"
Read the full analyst report on "FULT"
Zacks Investment Research

Zacks Bull and Bear of the Day Highlights: Sohu.com, Inc., Cousins Properties, JPMorgan Chase, Wells Fargo & Company and Zions Bancorporation – Press Releases

Zacks Market Commentaries — Tue, 07 Jul 2009 13:03:38 +0000

For Immediate Release

Chicago, IL - July 7, 2009 - Zacks Equity Research highlights Sohu.com, Inc. (SOHU) as the Bull of the Day and Cousins Properties (CUZ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on JPMorgan Chase (JPM), Wells Fargo & Company (WFC) and Zions Bancorporation Pharmaceuticals (ZION).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

Sohu.com, Inc. (SOHU) is the second-largest Internet portal and one of the most well-known online brands in China. Sohu's pipeline for its new online games remains strong and is expected to drive meaningful growth in late 2009 and 2010.

The company spun-off part of its gaming division Changyou.com via an ADS offering, which is expected to increase user base and help gain shares in the MMORPG market. We are also encouraged by the company's growing cash balance as well as its debt free balance sheet.

We believe that the current stock price does not fully reflect the company's intrinsic value. Concerns are related to online ad spending, as consumers remain cautious in their spending. We maintain our Buy rating on the shares of SOHU with a six-month target price of $75.00.

Bear of the Day:

Cousins Properties (CUZ) reported 1Q FFO of $0.15 per share, $0.10 lower than our estimates due to higher expenses and lower top line revenue. CUZ has a concentration of assets in Atlanta and Dallas, two markets with increasing downtown and suburban office vacancies.

In addition, the company s retail portfolio continues to struggle. While the company's office portfolio performed relatively well in the 1st quarter, we think operations will deteriorate.

The dividend was cut 32% in an effort to conserve cash. Another cut could be coming in 2009 if conditions do not improve.

Yet More Banks Recession Victims – Analyst Blog

Zacks Market Commentaries — Mon, 06 Jul 2009 20:22:32 +0000

Even more banks turn victims of recession

U.S. regulators have shut down 7 more banks with total assets of about $1.5 billion, bringing the total number of failed U.S. banks during 2009 so far to 52, compared to 25 in 2008 and 3 in 2007. This marks the largest number of bank failures in one week during the 2008-2009 banking crisis, breaking the previous record of five bank failures in the previous week.

The failed banks witnessed massive capital erosion stemming from losses due to significant exposure in collateralized mortgage obligations (CMOs), commercial real estate loans and other commercial and industrial loans.

The Federal Deposit Insurance Corp. (FDIC) was appointed receiver of the following 7 failed banks: The John Warner Bank of Clinton, First State Bank of Winchester, Rock River Bank of Oregon, Elizabeth State Bank, Founders Bank, First National Bank of Danville and Millennium State Bank of Texas. FDIC arranged for other institutions to assume all the deposits and branches of the failed banks.

The FDIC estimates total cost to the deposit insurance fund from the failure of these banks to be approximately $314 million. The deposit insurance fund now stands at its lowest level since 1993 - $13 billion as of the end of March 31, 2009.

The largest acquirers of U.S. bank failures during 2008 and 2009 include JPMorgan Chase (JPM) (acquired Washington Mutual), Wells Fargo & Company (WFC) (acquired Wachovia Bank), Zions Bancorporation (ZION) (acquired Alliance Bank), BB&T Corp. (BBT) and Fifth Third Bancorp (FITB).

Though the signs of recession easing out may bring an end to the losses on home mortgages, we expect losses on commercial real estate loans portfolio to continue to affect profitability in the near-term for banks (e.g FITB, ZION) having large exposures. Furthermore, based on our expectations that unemployment and loan defaults will continue to rise in the coming months, we expect more small-cap banks to succumb in this prolonged recession.
Read the full analyst report on "JPM"
Read the full analyst report on "WFC"
Read the full analyst report on "ZION"
Read the full analyst report on "BBT"
Read the full analyst report on "FITB"
Zacks Investment Research

Wells Fargo Expands Securities – Analyst Blog

Zacks Market Commentaries — Mon, 06 Jul 2009 17:01:20 +0000

On July 6, 2009, Wells Fargo & Company's (WFC) announced its plans to expand its securities business. The company intends to put in incremental investment in the securities business that it primarily inherited when it acquired Wachovia at the end of 2008 for $12.5 billion.

The business, to be named Wells Fargo Securities, will offer a wide range of services like merger advice, stock and bond underwriting, loan syndications and fixed-income trading. With the expansion, the company will bring competition to its rivals such as JPMorgan Chase (JPM) and Citigroup (C).

We believe that the expansion will positively impact the profitability of the company and is well-timed, especially when we see some signs of rebound in the U.S. markets. This also comes as a bold move on the part of WFC when the financial services industry is not in the pink of health and a major competitor, Citigroup, is struggling.

Wells Fargo & Company is the fourth largest (in terms of assets) financial services company in the U.S., with $1.3 trillion in assets and nearly $800 million in deposits, providing retail and wholesale banking, mortgage banking, consumer finance, equipment leasing, insurance brokerage, agricultural finance, securities brokerage, trust, investment banking and other financial services.

WFC is scheduled to release its 2Q09 financial results before market open on July 22, 2009 followed by a conference call. Ahead of its 2Q09 financial results, we are maintaining our Hold recommendation on the shares.
Read the full analyst report on "WFC"
Read the full analyst report on "JPM"
Read the full analyst report on "C"
Zacks Investment Research

BJ’s Wholesale Club (BJ) – Options Commentary

Zacks Market Commentaries — Tue, 07 Oct 2008 00:00:00 +0000

In last week's edition of Trading Tools, financial titan Wells Fargo & Company (WFC) was examined, as it appeared on the Zacks Put/Call Ratio Greater than 1.0 filter. Utilizing the same screener this week in an effort to find stocks surrounded by heavy pessimism in the options arena, another equity caught my eye: discount retailer BJ's Wholesale Club, Inc. (BJ).

Before we begin, let's explain the contrarian stance that makes Schaeffer's so unique. When searching for a bullish pick, we like to see heavy skepticism toward an outperforming stock, as this leaves ample room for upgrades or other positive catalysts to fuel the stock higher. When searching for a bearish pick, on the other hand, contrarians are looking for significant bullish sentiment toward an underperforming stock, as we believe an excess of optimism is a sign that everyone has already bought into the stock and sideline money is virtually tapped out.
However, keep in mind that some optimism and pessimism is genuinely warranted and isn't always a contrarian indicator like an outperforming stock with many "buy" ratings or an underperforming stock with a plethora of "sell" ratings.

The Put/Call Ratio Greater than 1.0 Screener

First, an explanation on our stock screener. The filter looks for stocks with a high put/call open interest ratio, indicating puts outnumber their call counterparts amongst near-term options. Why is this important? Simply put, a high Schaeffer's put/call open interest ratio (SOIR) measuring options slated to expire within 3 months suggests that expectations for the security to rally are extremely low. In other words, a high ratio usually indicates pessimism amongst short-term options speculators.

From a contrarian perspective, we are looking for a stock that has low investor expectations (such as heavy put trading) and a strong technical performance. This combination of strength on the charts and skepticism among option traders leaves substantial room for continued upward momentum should these bearish bets unwind.

Bears bombard BJ's

As mentioned above, BJ grabbed my attention due to its unusually high SOIR. More specifically, the security's SOIR is currently docked at 2.42, indicating that puts more than double their call rivals among options slated to expire within 3 months. Furthermore, this ratio ranks in the 84th annual percentile. In other words, near-term options players have been more doubtful of BJ only 16% of the time during the past 52 weeks.

Digging even further into the data, we find that the pessimism surrounding BJ has been on the rise during the past couple of weeks. During the past 10 days in the International Securities Exchange (ISE), the equity has seen more than 2.5 times as many puts than calls bought to open. What's more, this ratio's rank of 72% tells us that during the past 10 trading sessions, bearish bets were added at a faster pace than usual on the exchange.

Outshining the broad market

Since hitting a low near the 10 level in mid-2003, the shares of BJ have virtually quadrupled atop double-barreled support from their 20-month and 40-month moving averages. In addition, compared to the broad market, the security has been on overachiever, outdistancing the S&P 500 Index (SPX) by 12% during the past 40 trading sessions.

However, the stock could face a potential speedbump in the round-number 40 region, as this neighborhood has halted rally attempts several times in the past year, and acted as long-term support in 2001. At last check, the equity was trading near the 38.60 level.

Word on the Street

Meanwhile, in conjunction with the doubt among options speculators is the sentiment among the brokerage bunch. According to Zacks, only 4 out of 13 ranking analysts rate BJ a "buy" or better.

Should the stock's recent gains motivate the bearish brokers to reevaluate their positions, any upgrades and/or price-target boosts could act as potential catalysts to the upside.

Also in the bears' lair are short sellers. Short interest on BJ has skyrocketed since the beginning of the year, and surged nearly 24% during just the past 2 weeks. These pessimistic positions now account for about 14 million BJ shares, or roughly 23% of the equity's total available float.

However, should the skeptics in the short-selling arena get spooked by the stock's status as an outperformer, it would take about 8 trading days at the stock's average daily trading volume for these bearish bets to unwind. A short-covering rally of this magnitude could also act as a near-term boon for the shares.

The Bottom Line

In conclusion, as potential forms of support, BJ bulls should keep an eye on the stock's 20-month and 50-month trendlines, which have ushered the shares higher for roughly 5 years. On the flip side, investors should take heed to the round-number 40 level; a monthly close above this region would be a feat not accomplished since May 2002.

More importantly, though, BJ fans should note the lingering skepticism surrounding the outperformer. Should the shares continue their quest for new highs, an unwinding of pessimism whether in the options pits, via upgrades and/or price-target boosts, or a short-covering rally could all add fuel to the stock's technical fire.

"BJI" Free Stock Analysis: Buy? Sell? Hold?
"NOB" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Wells Fargo & Company (WFC) to Purchase Wachovia Corp.

QualityStocks — Fri, 03 Oct 2008 20:26:57 +0000

Tensions flared this Friday morning between Wells Fargo and Citigroup over the purchase of Wachovia Corp. In a surprise move, Wachovia agreed to be acquired by Wells Fargo in a $15.1 billion all-stock deal. Citigroup demanded that the deal be called off, insisting that negotiations with other entities was prohibited as part of the agreement [...]