Jack Adamo has been a bull on U.S. Bancorp (NYSE: USB) and is now recommending doubling the position that he holds in his model portfolio. Here's the latest from his Insiders Plus newsletter.
"US Bancorp is accepting $6.6 billion in new capital from the TARP program. Tier One capital will rise from 8.5% to 11.4% as a result of the new deal.
"The company will issue preferred stock to the U.S. Treasury at an annual rate of 5% for five years, increasing to 9% per year thereafter if the company has not redeemed the shares. I doubt they'll go unredeemed.
The accompanying table presents the 25 lowest-rated stocks in my US-based Regional Banking Index. The index contains a total of 99 companies with market caps between $500 million to $20 billion which are classified as either regional banks or savings and loan companies. The ratings for each company are calculated quarterly based on a formula which considers the price-to-book ratio, the trailing 52-week stock price performance, and the percentage of total market caps represented by each company.
Integrity Bank, Alpharetta, Georgia, with $1.1 billion in total assets and $974.0 million in total deposits as of June 30, 2008, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named receiver. The FDIC Board of Directors today approved the assumption of all the deposits of Integrity Bank by Regions Bank, Birmingham, Alabama. All depositors of Integrity Bank, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Regions Bank for the full amount of their deposits, and
"Warren Buffett's holding company, Berkshire Hathaway (NYSE: BRK.B), has been the single greatest investment of our lifetimes," says Alexander Green, noting, "His compounded annual gain from 1966 to 2007 was 21.1% vs. 10.3% or the S&P 500."
In the Oxford Insight, the investment director explains, "It is now time to buy the 'ultimate no-brainer'." Here's his assessment.
"Despite this strong long-term performance, Buffett experienced a rare earnings letdown during the second quarter of this year.
"So far, the financial sector has written off more than $300 million in assets. By some accounts the damage will rise to $1 trillion or more before all is said and done.
"So far, the financial sector has written off more than $300 million in assets. By some accounts the damage will rise to $1 trillion or more before all is said and done.Â
"The selloff, which at its nadir was marked by a 55% year-over-year decline in the KBW Index, pushed the constituent members down
Could be wrong, but seems this financial is trading near 2x book value, seems a little high in such risky times. While USB has looked a lot safer than those banks exposed to low-end residential RE loans, if the economy gets worse credit cards and commercial lending will be at risk. There's a chance USB is at a crossroads where the things that have kept them looking good, may not look so good if this unemployment rate the gov't publishes keeps rising.
The model portfolio of Insiders Plus gains 48% last year; here, editor Jack Adamo reviews two of his portfolio holdings -- both bank stocks being accumulated by Warren Buffett's Berkshire Hathaway.
"U.S. Bancorp (NYSE: USB) reported a slight decrease in Q1 earnings of 62¢ per share versus 63¢ last year; the shares rose 2.8% the next day. Compared to the disastrous results of its peers, this small decline in earnings was a home run.
"That's a testament to the company's savvy managers. USB steered clear of the toxic prob
I believe that dividend increases are good for many reasons, not the least of which, it means I'm getting a "raise." But there is another important message that dividend increases offer and that is what academia calls, "signalling."
Signaling is the idea that since a dividend hike, unlike earnings, is a voluntary action by the board of directors, and since the board can pay any amount of dividends they wish, or none at all, that this unencumbered action has meaning as much about the future as the past . Thus, dividend actions take on great importance during crises. The reason is obvious -- i...
This is the second part of a recent discussion between an old friend and client about the economy, markets, and interest rates.
Friend: So I think we both agree the subprime fiasco, while bad for housing and many banks, may not spill over as far into the overall economy as investors and the media now believe. If that is the case, what do your valuation models now say about stocks in general? I guess I'm particularly interested in the real bargains you might be finding.
GCD: We actually see bargains across almost all industry sectors, as well as, international stocks. But if you want to go whe
U.S. Bancorp (USB) operates as the holding company for U.S. Bank, which provides commercial banking and financial services in the United States. It generates various deposit products, including checking accounts, savings accounts, money market savings, and time certificates of deposit accounts.<!--more-->
The company is a dividend aristocrat as well as a major component of the S&P 500 index. It has been increasing its dividends for the past 36 consecutive years. One of USB's stockholders is no other than the Oracle of Omaha, one of the best investors in the world. From 1998 up until 2007 t
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"Recent valuations in financial stocks suggest either 'the world is coming to an end' or there are some great values," says 
