With its share price down more than 20% so far this year, Washington Mutual Inc. ought to be a textbook buying opportunity for investors hunting for major mortgage lenders that are down but not out.
WaMu has "good liquidity," or diverse sources of funding, according to a Moody's Investors Service report last week. The Seattle thrift's retail-banking operation is raking in cheap deposits to help fund new mortgages. And about the best thing going for it these days is that it doesn't look like the next Countrywide Financial Corp.
But stumbles made by WaMu long before the credit-market turmoil have undermined the credibility that other subprime lenders -- such as Wells Fargo & Co. -- are leaning on to lift their ailing stocks.
The result: Even though WaMu has tightened underwriting standards for riskier loans, many analysts and investors are taking a talk-is-cheap attitude about the assurances. "My opinion is it'll get worse," says Stuart Plesser, a Standard & Poor's stock analyst who slapped a "sell" recommendation on WaMu last week. He thinks the share price is likely to sink an additional 8% in the next year.
[WSJ Today Live]
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Anal ysts: Housing has bottomed. Financials, especially the money center banks are a compelling buy after this "stop the madness" unwarranted correction in financials.
Oh Yeah ! Did you S&P geniuses (or should I say morons) not rate those junkie CDOs triple A rated ? Oh Yeah !
AI
