TheStreet Search RSS Feed:

Fannie and Freddie Ride Again: Financial Winners

Fri, 24 May 2013 16:35:25 EDT

NEW YORK (TheStreet) -- Fannie Mae and Freddie Mac were again huge winners on Friday.

Shares of Fannie Mae were up 41% to close at $2.97, while Freddie Mac was also up 41% to close at $2.81, after Ralph Nader in an op-ed piece in the Wall Street Journal said the two companies' common shareholders should fight against the federal government's "great Fannie and Freddie rip-off.".

The two mortgage giants together are known as the government-sponsored enterprises, or GSEs, and were taken under government conservatorship in September 2008. Also see: Ralph Nader, Wounded Shareholder of Fannie Mae Freddie Mac >> ...

Click to view a price quote on FNMA.

Click to research the Real Estate industry.

Ralph Nader, Wounded Shareholder of Fannie Mae Freddie Mac

Fri, 24 May 2013 12:41:04 EDT

NEW YORK (TheStreet) -- Famous consumer advocate and former presidential candidate Ralph Nader has renewed his efforts on behalf of common shareholders of bailed out mortgage giants Fannie Mae and Freddie Mac .

In a Wall Street Journal op-ed, Nader argues that the government treated shareholders of the government sponsored enterprises or GSEs unfairly when it placed the agencies in conservatorship in 2008. Nader made a similar case in the newspaper in 2011.

Shareholders, including Nader himself, had purchased Fannie Mae and Freddie Mac shares believing them to be safe investments, he said. They had held on to their investments even as the financial crisis loomed larger, encouraged by statements from the companies' executives and high-ranking government officials that the agencies were "adequately capitalized." ...

Click to view a price quote on FNMA.

Click to research the Real Estate industry.

4 Western Bank Stock Picks From Sterne Agee

Fri, 24 May 2013 11:47:24 EDT

NEW YORK (TheStreet) -- "With investors becoming more hesitant about an extended bank stock market, we see less value than earlier in the year."

Sterne Agee analyst Brett Rabatin's above comment in a note to clients on Thursday sums up the changing landscape for investors looking for bargain bank stock picks. Over the last few years, as the banking industry has recovered from the credit crisis, investors have been able to pretty much rely on a continued upward movement in earnings, while also enjoying plenty of heavily discounted stocks to pick from.

But the KBW Bank Index has returned 18% this year, following a 30% increase during 2012. The KBW Regional Bank index is up 13% year-to-date, after rising 10% last year, showing that the smaller banks had not fallen quite as far as the large-cap banks. ...

Click to view a price quote on TCBI.

Click to research the Banking industry.

Procter & Gamble Investors Cheer Lafley, but Bounce Won't Last (Update 1)

Fri, 24 May 2013 11:06:00 EDT

Updated from 9:33 a.m. ET with additional information throughout.

NEW YORK (TheStreet) -- Procter & Gamble shares were gaining Friday on news A.G. Lafley will return to lead the company as it searches for a permanent CEO, but Lafley may not find it so easy to repeat his previous success.

Lafley, who takes over from Bob McDonald, led Procter & Gamble for a successful stretch from 2000 to 2009. During those years, P&G returned more than 12% to shareholders excluding dividends, while all the major indices posted losses. ...

Click to view a price quote on PG.

Click to research the Consumer Non-Durables industry.

Fannie and Freddie: Financial Winners

Thu, 23 May 2013 16:33:28 EDT

NEW YORK (TheStreet) -- Fannie Mae and Freddie Mac were the big winners among major financial names, on an otherwise weak day for the stock market.

Shares of Fannie Mae were up 15% to close at $2.10, while Freddie Mac was up 20% to close at $2.00. The two mortgage giants together are known as the government-sponsored enterprises, or GSEs, and were taken under government conservatorship in September 2008.

Fannie's shares have returned 708% this year, while Freddie's shares have returned 669%, as both companies have shown very strong profits. ...

Click to view a price quote on FNMA.

Click to research the Real Estate industry.

Fannie Freddie Rally Returns With a Vengeance

Thu, 23 May 2013 15:15:51 EDT

NEW YORK (TheStreet) -- Fannie Mae and Freddie Mac shares have more than doubled over the past 10 trading days on heavy volumes, adding to big gains posted in March after the shares had been dormant for several weeks.

Professional investors who have long touted the junior preferred shares of the Government Sponsored Enterprises (GSEs) have shaken their heads in disbelief at the common stock rally, though at least one big fund focusing on distressed investments is now rumored to be trading the common shares. The senior preferred shares of the GSEs and 80% of the common stock are owned by the U.S. Treasury, which put Fannie and Freddie into conservatorship in Sept. 2008.

Despite a broad market decline on Thursday, Freddie Mac common shares were up 17.37% to $1.98 at about 2:30 p.m. EST and are up about 650% year to date. Fannie Mae shares were up 14.21% to $2.09 and are up more than 700% year to date. That compares to roughly 200% gains for preferred issues. ...

Click to view a price quote on FNMA.

Click to research the Real Estate industry.

Goldman Says, What Too Big to Fail Advantage?

Thu, 23 May 2013 12:50:23 EDT

NEW YORK (TheStreet) -- Goldman Sachs has published a paper that debunks the idea that the biggest banks get an unfair funding advantage because they are considered "too big to fail"

The firm's public policy research unit, the Global Markets Institute, said in a May report titled "Measuring the TBTF effect on bond pricing" that recent studies overstate the funding advantages of so-called Too Big to Fail Banks.

According to the researchers' findings, the big banks enjoyed a slight funding advantage of about 6 basis points on an average between 1999 and 2007, which widened sharply during the crisis but has now reversed to a "disadvantage." ...

Click to view a price quote on BAC.

Click to research the Banking industry.

MoneyGram CEO: Focused on Growth

Thu, 23 May 2013 09:50:02 EDT

NEW YORK (TheStreet) -- TheStreet's Jill Malandrino sat down with Pam Patsley, the CEO of MoneyGram International , to discuss what the company is working on and why shareholders should pay attention. Pricing pressure has been a key focus point for MoneyGram investors, especially with Wal-Mart deeply discounting a similar service.

"We love growing market share and we love expanding margins," Patsley told Malandrino. Patsley said her company is focusing on alternative channels. Those include going online, using a mobile application or a kiosk to transfer money. The focus has really been on self-service and creating an easy-to-use system for customers, she said. When asked what separates Moneygram from its competitors, Patsley told Malandrino, "we have a brand message that resonates with the consumer. Convenience is so important."

Moneygram focuses on building a network that customers can send and receive money however they prefer, (bank-to-cash, cash-to-cash, bank-to-bank, etc.). When it comes to financing, Patsley said that retiring old senior notes and securing new financing will save Moneygram around $28 million per year in interest. ...

Click to view a price quote on MGI.

Click to research the Financial Services industry.

Do Not Chase All Cheap Bank Stocks: KBW

Thu, 23 May 2013 09:49:25 EDT

NEW YORK (TheStreet) -- Investors late to the bank stock rally may prefer to load up on "cheap" bank stocks, but not all of them are necessarily bargains.

According to KBW analyst Christopher Mutascio, investors have been buying stocks that trade at low price-to-tangible book multiples on the premise that such stocks would have more upside as they are currently "under-earning."

"That may or may not be the case," the analyst wrote, adding, "Some banks may be 'cheap' on a P/TBV measure because they have materially lower-than-peer profitability today and in the future. So their discounted P/TBV multiple may be justified and warranted." ...

Click to view a price quote on KEY.

Click to research the Banking industry.

Immelt Pushes Harder to Shrink GE Capital

Thu, 23 May 2013 09:35:26 EDT

NEW YORK (TheStreet) -- General Electric has made great progress in shrinking GE Capital, and CEO Jeff Immelt on Tuesday said the company was considering spinoffs through public offerings as a way to meet its goals.

GE reported first-quarter operating earnings of $4.059 billion, or 39 cents a share, increasing from $3.567 billion, or 34 cents a share, during the first quarter of 2012. GE Capital contributed profit of $1.927 billion, or 47% of the parent company's operating earnings. Also see: GE Beats Estimates, Revenue Falls >>

Immelt has long stated that GE's goal is to grow its industrial earnings and shrink GE Capital sufficiently to have the conglomerate deriving 70% of earnings from its industrial business. ...

Click to view a price quote on GE.

Click to research the Industrial industry.

Starwood Upgraded as Capital Return Eyed

Thu, 23 May 2013 08:47:20 EDT

NEW YORK (TheStreet) -- Starwood Hotels got an upgrade to "buy" from Bank of America Thursday as analysts at the bank cited the potential "for a significant return of capital."

Starwood's price target also got a lift from the bank's analysts, to $84 from $70. The analysts also see the potential for asset sales "later in the cycle."

Hotel stocks have underperformed the market year to date, as revenue per available room (RevPAR) -- a closely watched industry metric, has been "volatile," according to Bank of America's analysts. ...

Click to view a price quote on HOT.

Click to research the Leisure industry.

JPMorgan Chase Wins Again

Wed, 22 May 2013 16:39:38 EDT

NEW YORK (TheStreet) -- JPMorgan Chase was again winner among the nation's largest banks on Wednesday, with shares rising over 1% to close at $53.63.

The strong action for JPMorgan's stock -- following a vote of confidence in CEO James Dimon by the company's shareholders on Tuesday -- ran counter to the broad market. The Dow Jones Industrial Average was down 0.5%, while the S&P 500 and Nasdaq Composite saw declines of 1%. Also see: Why JPMorgan Will Always Be a Better Villain Than Apple >>

In a strong bull market so far this year, one of the biggest questions for investors is when the Federal Reserve will finally pull back on its economic stimulus efforts, and how dramatically the central bank's policy will change. The Fed has kept the short-term federal funds rate in a range of zero to 0.25% since late 2008. Since September, the Fed has been expanding its balance sheet through net monthly purchases of $85 billion in long-term securities, in an effort to hold long-term rates down. ...

Click to view a price quote on JPM.

Click to research the Banking industry.

Ben vs. Bernie on Too Big to Fail

Wed, 22 May 2013 12:34:22 EDT

NEW YORK (TheStreet) -- Federal Reserve Chairman Ben Bernanke said in testimony Wednesday that he believes the best approach to solving "Too Big to Fail" would be to require banks to hold more capital.

In an exchange with independent Senator Bernie Sanders of Vermont, Bernanke said that the Fed was doing a "lot of things" through the Orderly Liquidation Authority as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to address the issue.

Regulations based on Dodd-Frank aim at making banks safer by requiring them to hold more capital and restricting risk taking activities, while preventing future bailouts. ...

Click to view a price quote on JPM.

Click to research the Banking industry.

Why JPMorgan Will Always Be a Better Villain Than Apple

Wed, 22 May 2013 11:00:43 EDT

NEW YORK (TheStreet) -- Apple CEO Tim Cook and JPMorgan Chase boss Jamie Dimon both successfully fought off challenges to their power Tuesday, but Cook's job will always be easier.

For evidence of the Apple advantage, one need look no further than Carl Levin (D.-Mich.), the perpetually dour Senate Investigations subcommittee chairman, who summoned Cook to Washington to call attention to Apple's tax avoidance schemes, was forced to admit "we love the iPhone and the iPad." His Republican counterpart, John McCain of Arizona, was similarly neutered.

As a result, Tuesday's Apple hearing wasn't about Apple. It was about changing the tax code to keep companies from stashing billions abroad in places like Ireland, even though everyone knows their profits really come from somewhere else -- California, in Apple's case. ...

Click to view a price quote on AAPL.

Click to research the Consumer Durables industry.

Foreclosure Inventory Rate Drops 25% in April: LPS

Wed, 22 May 2013 10:16:14 EDT

NEW YORK (TheStreet) -- The number of U.S. homes in some stage of the foreclosure process fell 25% year-over-year in April, as fewer Americans fell behind on their mortgage loan payments and banks pursued other alternatives to foreclosure.

According to the LPS "First Look" Mortgage Report, the delinquency rate -- the percentage of mortgages that are more than 30 days past due but not in foreclosure -- fell to 6.21%, the lowest level since 2008.

The number of borrowers who were either delinquent or in the foreclosure process fell to 4.7 million in April, after dropping below 5 million in March, for the first time since 2008. ...