Opinions Jonathen Wellum, B. Comm, B. Sc
Washington Mutual IncWAHQE-Q2TOP PICKDec 12, 2003
(A past top pick Sept 26/03. Up 1.3%.) Has gone from the massive refinancing boom in the US into servicing revenues on mortgages. Long-term, a powerful cash flow generator.
$39.89
Stock price when the opinion was issued
trust, savings and loan
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WAIT
Recently went on his Stock Watch list, which has over 200 companies. Once he finds a company, he doesn't go in for at least 6 months. Could be a Buy towards the end of the year when tax loss season is down. He wants to see that there is stability in the stock price and that the company will survive.
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SELL
More bullish on the brokers than on banks. T-bill market in the US has had big demand so rates have gone down about 2%. This has created value in financials. His model price is $48.33, a 26% positive differential. As the T-bill market gets back the interest rate will go up. Financials will be a hard group in the next couple of years.
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SELL
Great branch network. Because of its big concentration on home mortgages, it is not the right place to be. Wonderful dividend yield. Why be there with the currency factor?
Gavin GrahamOwned
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DON'T BUY
4.8% dividend. A very well run bank. There is potentially some problems in the housing market. Hasn't moved much in the last year.
John O'Connell, CFAOwned
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TRADE
(Thoughts on caller's PUT for Jan/07 @ $35.) Believes there is a real estate bubble but that it may go for another couple of years, beyond your 2007 date. Anyone doing a lot of high ratio mortgages in the US will be negatively impacted by a bubble. A PUT option gives you limited risks, even if you are wrong.
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