Considered a stalwart of the banking sector even into early 2009, US Bancorp (NYSE: USB ) has been pummeled along with the rest of the sector since then. The stock saw a peak of more than $40 in September, and it's since lost more than 70% of its value, as concerns over the economy and the soundness of the financial system as a whole have infected investors' sentiment.
While bullish investors have been plowed under by the stampede to sell US Bancorp, there's been plenty of room for bears to benefit. USB is a four-star stock on CAPS, but that didn't discourage salesgenieshort to give the stock a big thumbs-down back in December. The timely call racked up 47 points for salesgenieshort; the stock has fallen nearly 60% against the S&P's 13% drop since then.
salesgenieshort is one of CAPS's All-Stars -- players with a rating of 80 or greater -- and has managed an impressive stock-picking accuracy of 67%, while racking up more than 2,300 points. USB isn't this player's only great call. Here's a look at a few other prescient picks:
|
Company
|
Date Picked
|
Call
|
Points
|
CAPS Rating (5 max)
|
|
Las Vegas Sands (NYSE: LVS )
|
10/30/08
|
Underperform
|
55
|
**
|
|
DryShips (Nasdaq: DRYS )
|
12/15/08
|
Underperform
|
48
|
**
|
|
Dow Chemical (NYSE: DOW )
|
10/6/08
|
Underperform
|
44
|
****
|
Data from CAPS.
So what is this investor looking at these days? Here are a few of the salesgenieshort's recent calls on CAPS:
|
Company
|
Date Picked
|
Call
|
CAPS Rating
|
|
Textron (NYSE: TXT )
|
2/9/09
|
Outperform
|
***
|
|
Mueller Water Products (NYSE: MWA )
|
2/9/09
|
Outperform
|
*****
|
|
Repros Therapeutics
|
2/9/09
|
Underperform
|
*
|
Data from CAPS.
While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer look at Mueller Water.
A watered-down water stock
The future looked promising for Mueller Water when it was fully spun off from Walter Industries (NYSE: WLT ) back in late 2006. Though some cracks were beginning to show in the housing market, the company was benefitting from the need for wastewater infrastructure driven by new residential construction. Also looming on the horizon was the day that municipal and state governments would decide to do something about old water infrastructure throughout the U.S. -- a major investment that would likely bring big business to Mueller.
Reality has been much different for Mueller investors. The stock has fallen more than 80% from its highs in 2007. As we all know, residential construction did a perfect swan dive right into a big pool of oblivion, and as you might expect, this clobbered Mueller. As for that big infrastructure overhaul, well, it still hasn't happened -- even though those municipal pipes aren't getting any younger.
Valuing Mueller today becomes a bit more difficult because of the losses the company has taken, as well as our current position in the downswing of a cyclical slump. Still, the stock is certainly at a more compelling price than it was just a year ago. Meanwhile, many CAPS members see the government's stimulus plan as a potential avenue for funds to finally make their way to water infrastructure projects.
CAPS All-Star HansHauge is one of the 1,200-plus CAPS members who have been bullish on the stock. He recently quoted another member who wrote "Underpriced...I have to agree that this pick will beat that market at some point in the next year." HansHauge then added: "Being tied to contruction is not exactly the most favorable thing right now, but water is always a basic need. No ammount of recession will put the plumbing industry out of work."
The $1.1 billion in debt that Mueller carries right now tempers my bullishness on the stock considerably, but I agree with a lot of what CAPS members have to say about the prospects for the business as we prepare for a deluge of government stimulus money.
But here's the important question: What's your take on Mueller? Will the government cheese finally get into the water, or will the stock continue to slip? Get in the action by clicking over to CAPS. CAPS is absolutely free and already has over 125,000 stock pickers chipping in to find the best stocks out there.
More CAPS Foolishness:
RSS Headlines
Fool UK