When stocks fall fast and far, they sometimes set themselves up for remarkable rebounds. The following equities suffered dramatic drops over the past week. With help from the 170,000 members of Motley Fool CAPS, we'll see whether any of them have the potential to bounce back:
|
Companies
|
How far from 52-week high? |
Recent Price |
(out of 5) |
|---|---|---|---|
|
New York Community Bancorp |
-20% | $14.94 | ***** |
| Walgreen | -12% | $41.39 | **** |
|
Micron |
-40% | $7.21 | **** |
|
ATP Oil & Gas |
-31% | $14.67 | **** |
|
BPZ Resources |
-52% | $3.29 | *** |
Companies are selected by screening on finviz.com for abrupt 5% or greater price drops over the past week. 52-week high and recent price data provided by finviz.com. CAPS ratings from Motley Fool CAPS.
Five super falls -- one superball
There's no two ways about it. If you owned any of the five stocks named above last week, you're significantly poorer for it today. So what went wrong?
Starting at the top, TheStreet.com blamed New York Community Bancorp's decline on a release of "crude oil stockpiles" by the International Energy Agency. Seems like a tenuous connection to me, as regards NYCB ... but it does help to explain why South American oil driller BPZ and Gulf of Mexico explorer ATP are swimming in an alphabet's soup of trouble lately.
Speaking of trouble, Micron missed earnings Thursday, as profits plunged to $0.07 per share from a reported $0.92 per share one year ago. Fellow Fool Anders Bylund is optimistic that there's value to be found at today's prices (and I agree.) For now, though, Mr. Market seems to disagree with us.
And of course, you've doubtless heard all about Walgreen's feud with Express Scripts ...
The bull case for New York Community Bancorp
What you haven't heard much about, though, is the reason for NYCB's decline. TheStreet.com's non-explanatory explanation notwithstanding, there doesn't seem to be much news behind the stock's recent slide -- and this has Fools starting to get optimistic about this five-starred stock.
Why? As CAPS member cesarechaz points out, NYCB boasts "the largest population in it's area." And jnuetzmann argues that NYCB has a "quality loan portfolio" in the market, and pays "consistent dividends" to its shareholders.
All-Star investor Chemdawg praises the banker's "extremely low debt ..very high yield and increasing earnings and cash flow." And GeorgeDe tells us this "good" bank is "buying other banks" and "expanding it's reach."
NYCB: Buy the numbers
All of which suggests to me that our CAPS community has found a classic growth-and-income play at NYCB -- and the facts bear that out. Consider for a moment how New York Community Bancorp stacks up against a few of the marquee names in Big Banking:
|
Bank |
Return on Assets |
Return on Equity |
Profit margin |
|---|---|---|---|
| NYCB | 1.3% | 9.9% | 38% |
|
JPMorgan Chase |
0.9% | 11.4% | 22% |
|
Citigroup |
0.5% | 6% | 15% |
|
Bank of America |
negative | negative | negative |
Source: Yahoo! Finance.
While its return on assets isn't the highest in the group, it's close. And NYCB bests its competition on both return on assets and profit margin. At just 12.2 times earnings, the stock trades at a discount to every name but JP Morgan. Best of all, NYCB pays a generous 6.6% dividend yield. In a banking sector that's become notoriously stingy, that's better than just about any big banker you can name.
Time to chime in
To me, this all adds up to a compelling case for buying New York Community Bancorp -- but that's just my opinion. What we'd really like to know is what you think of the company. If you've got an opinion of NYCB, share it on CAPS.
