Any thoughts on ETFC after their huge selloff?
http://www.247wallst.com/2008/01/share-collapse.html
"After a huge sell-off of Countrywide (CFC) shares that forced the company to deny it was in deep trouble, shares of another weak financial firm, E*Trade (ETFC) are off 20% and have traded as low at $2.08. Nice day for short sellers."
This seems a bit severe given that their exposure to anything subprime related is not as bad as people think they really are. In addition, they have a good business model incorporating brokerage, loans, and retail banking. They've been punished already due to their bad allocations but this seems unwarranted. Doesn't hurt that Citadel injected over $2 billion in the company. Any one think this might be a good entry point?
Best Answer
508 points
John answered 2 years ago …
As I learned with CFC Countrywide financial an opportunity to buy is only as good as the environment the stock finds itself. Meaning the environment around Etrade is so negative along with a poor performing sector that it may take awhile for reasonable investors to begin to take new positions.
We can look at the business model and P/E ration and say the company is cheap here and it probably is. This is a reasonable position except reason is not driving Etrade down, emotion is. Emotion has dragged everyone out of the stock and continues to pummel the stock. Their is no reason for the company to begin to trade higher here although it could.
The economy isn't helping either.
I would wait for the environment around Etrade or with-in the sector to get a little better. At this point you will see logical investor begin to put money back into Etrade. Right now the environment is just not right.
John
Answers
1130 points
sundarkambam answered 2 years ago …
Simple answer is : Market expects some big financial institution to file bankruptcy. This is what is causing the major names to be hit with everybody in a guessing game and all financial stocks taking a hit.
Read more from sundarkambam508 points
John answered 2 years ago …
If I were you I would read Ethan R's article in the tycoon report: "Catching Falling Knife Stocks? A Bloody Mistake!".
http://tycoonreport.tycoonresearch.com/articles/701243574/catching-falling-knife-stocks-a-bloody-mistake
