The Week in Preview – Misery Loves these Companies
May 11, 2008 2:00 pm
An excerpt from my weekly AOL Money/Finance column:
The earnings party of last week was full of fun and frolic. For the most part, if you followed my list of recommendations, you would have had you very own – “Fiesta de Finance.” (See Week in Preview – May 5)
The earnings season is still in full swing and should prove to give a great deal of action with the stocks that will be reporting. But these companies will have to fight through a few new economic barriers. With oil pushing past historic levels and questions beginning to surface concerning the ability of the investor to continue to support a market that has so many headwinds, the mood is likely to shift moving forward. It is time for discipline, short and simple. Now, more than ever investors need a plan. If you need help developing your strategy, you may want to check out my book, The Disciplined Investor.
In last the last installment of The Week in Preview, I was looking for party opportunities in honor of Cinco de Mayo. This week, Misery is the theme. That is the only word that comes to mind with oil at a level that you would have never expected, a massive and unrelenting credit and housing crisis and a banking system that is defunct.
Monday – May 12
We start the week with a report from IndyMac Bank (NYSE:IMB). This bank is smack in the middle of the housing problem. They are primarily a lending company that facilitates loans for single-family homes. They are also involved in the origination and trading of mortgages. How does that sound to you as an investment? Shares have slid from $23 in October 2007 to an unbelievable level of $3.50 recently. Ouch… If you are a shareholder still holding on with hope and a prayer for something…anything, keep on dreaming. The good news is that the stock is sporting a yield of 29%. But, if you think that yield is going to be maintained, tI have a bridge for sale. Estimates are for a loss of $1.92 per share for the quarter.