Drink In These 5 Top Stocks

• Report this Comment On December 01, 2008, at 1:13 PM, kurtdabear wrote:

  Sounds like a list of losers. I've long been a Boeing fan, but lately they've failed to prove they can still design planes that can fly somewhere besides on their internal computer systems. E-Trade is filled with toxic financial assets. First Marblehead is in financing. Select Comfort is in (expensive) home furnishing items. First Solar is an energy play when virtually all other competing energy sources are in free fall. There are good reasons these five are down and no particular reason to believe the trend will reverse any time soon.

• Report this Comment On December 02, 2008, at 2:21 AM, rossetti2000 wrote:

  Over the next five years the analysts that follow Etrade expect its earnings to grow at the annual average rate of 14.5%;

  http://www.nasdaq.com/earnings/earnings_growth.asp?symbol=ET...

  In 2007, Etrade divested Most of the toxic paper on its books:

  “In consideration for the cash infusion, Citadel received three primary items: substantially all of our asset-backed securities portfolio (approximately $3.0 billion in amortized cost)…”

  https://investor.etrade.com/secfiling.cfm?filingID=1193125-0...

  The home equity portfolio was performing relatively well in March of 2008 and it remains a relatively better performer than most other portfolios at some of the largest banks; here is a quote from CEO Don Layton:

  “I am pleased to report that with the first quarter behind us the home equity portfolio is performing broadly in line with our existing expectations. There are two reasons why we believe this performance remains relatively good. This is a high FICO portfolio and we stopped making high CLTV purchases in early 2007 thus avoiding some of the worst vintages and giving us more seasoning at this point in time.”

  http://seekingalpha.com/article/72807-e-trade-financial-corp...

  Etrade’s HELOC portfolio is stronger than Wells Fargo’s counterpart, and it has been running off since 2006. It will be largely gone by 2011. So far, Etrade had managed that portfolio very well; here’s a quote from a Motley Fool contributor:

  “Now Etrade has sold most all of its toxic waste at a huge non-cash loss. Etrade is keeping its 12-15B home equity portfolio. At the latest investor presentation, Etrade showed convincingly that its HELOC was stronger the Wells Fargo HELOC portfolio. The good thing about the HELOC, is it runs off quickly. Within 5 years it will be gone, and during that time Etrade will make more in interest income, than it has to write off...”

  http://caps.fool.com/Pitch/ETFC/1875466/etfc-has-landed-in-t...

  Presently, Etrade has a very large reserve against losses totaling nearly two billion in cash. But more importantly, Etrade continues to accumulate cash from the very instruments that everyone criticizes as being toxic; let’s look at the total revenue picture.

  Etrade’s quarterly revenue ending September 2008 was 657.03 million dollars. When adjusted to reflect yearly earnings, that rate is better than 2007 earnings. As Don Layton explained, the bank is self supporting:

  http://finance.google.com/finance?q=NASDAQ:ETFC

  From the looks of Etrade’s financial summary, Net income in 2007 was a negative 1,400 million dollars. However Etrade has chopped that loss down to minus 50 million dollars for September 2008 or an annualized 14% of what it was. To do that, Etrade had to keep earning a lot of cash in 2008, which it did…and Etrade still managed to boost its reserves against loss by more than 1,000 million dollars over that same period. Imagine if that reserve against loss should find its way to Etrade’s bottom line, and it has a better than even chance of doing so. Here’s why.

  Whether or not Etrade receives TARP, it will benefit indirectly by other, less well managed banks, like Citibank receiving TARP funds and guarantees. That load of government cash plus another load that the government is sending to “Main Street” will turn the housing and financial markets around. All Etrade has to do is to keep earning and to keep reserving. And as we know, Etrade’s reserves are the highest in the entire banking industry. That reserve is being placed against one of the better portfolios in the industry (as good as Wells Fargo’s portfolio).

  Etrade was first to become transparent; it reserved against losses like no other bank; it stopped lending to give it breathing room to recover; Etrade changed its management and has one of the best financial teams in the industry; Etrade has the best trading platform in the industry (including its unbelievable phone trading platform called Mobile Pro).

  That is why Etrade will be the unhidden financial jewel in 2010.

• Report this Comment On December 15, 2008, at 3:30 AM, FISHUNT wrote:

  I still prefer Scottrade.B H.

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