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Hudson City Bancorp, Inc. Message Board

  • gitchigome gitchigome Aug 31, 2007 3:25 PM Flag

    Barron's article

    Did anyone read the Barrons article Homelier Outlook for Mortgage Finance? I do not subscribe so could not access article. Have tried other links, etc. but no luck. It is suppose to mention HCBK in some fashion so would be interested in what was written. Thanks. Tried the Yahoo link for news but as of 3PM today no luck.

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    • Gitch
      Thanks for this information. It makes up for the negative of Jacobs article in Barrons. I think that is what made the stock tumble this week.
      Where have all the original HCBK posters gone?

    • i trade with mytrack and they have in the news

    • my bank holding will soon be takenover by one of the big fellows for $ 20 +

    • I also read the Barron's article and have been a customer for over 15 years. I believe this Bank is run by a bunch of people who are back in the 19th c. I tried to get them to accept a rather large deposit based on a new banking rule
      and they told me "they cannot do this". This was from a high placed executive. I went over to Columbia savings and they
      were well versed as to the new law and were glad to accept the deposit. This is not the first time something like this happened to me. If this bank does not get into the 21st C within the next few years, I believe they will be either taken over or have to issue more stock to stave off the take
      over as they did in the past. I am also a stock holder and I find that this narrow trading range of 12-15 dollars does not really reflect what the potental is for this bank.

      Disgusted in NJ

      • 3 Replies to dogmanzev
      • I think more than anything, this stock has been endlessly pumped up by Jim Cramer and that is what accounts for such a high PE. It does not earn much and at some point, will get impacted by a weakened economy without having great reserves

      • Yes DOGMANZEV, please enlighten us in regard to this "New Banking Rule" that HCBK did not know anything about.

        All of us who are Long in this position are well aware that HCBK will be a prime takeover candidate in the future. I have owned this stock since day one and have been a customer of HCBK for a number of years. I don't recall someone trying to take them over in the past as you stated in your message (I believe they will be either taken over or have to issue more stock to stave off the take
        over as they did in the past.) Can you elaborate on this as well?


      • DOGMANZEV:
        Very interesting, and most mysterious.
        Since I do not have access to Barron's it would be much appreciated if you will kindly capsule that "NEW BANKING RULE" that you claim HCBK refused to accept your large deposit.
        Granted that this bank is run most conservatively but shouldn't we investors all be glad it does in view of the
        doo doo that C & WM & JPM & WFC & BA & CFC & etc., etc., etc. have all stepped into?
        I just can't imagine why any Bank would unreasonably refuse to accept a "legally" large deposit.
        So if you would, please inform us of this so called 'New Banking Rule' you allude to.
        Thanks in advance.

    • hcbk has no debt and loads of cash. one bank where there is no sub-prime loans and they will make loans if only if you qualify in closely inforced rules. great buy!

      • 3 Replies to rhkgolf
      • It's touted as a good short opportunity ...

        Hudson City Bancorp [HCBK], which is based in New Jersey. The shares have gained about 60% from their July '07 lows and now trade at 21 times '08 estimates and two times tangible book. They have a wholesale funding and asset-generation strategy, which allows them to keep expenses low.

        Basically, they borrow funds from the Federal Home Loan Bank of New York and use repurchase agreements. So they, in effect, purchase money, more so than relying on deposits. In addition, they buy most of their assets, usually through brokers. A big chunk of their assets are first mortgages and mortgage-backed securities. So for the most part, they are not a retail originator of loans, and they are benefiting from the steepness of the yield curve.

        And, even with all that, they will earn less than a 10% return on equity this year, so I just don't get the valuation. Furthermore, when you have a wholesale business model, that means you don't really have a valuable franchise that another bank would pay much for. So a recent stock price represented approximately a 100% premium for their core deposits, which is how bank acquisitions typically get priced. And I don't think their deposits are worth nearly that much to a buyer. Everything looks great for them now, if you a call 10% ROE great. But they are not immune to credit risk in a recession and a weak housing market. I also think their loan-loss reserve at 0.15% is very low, relative to others'. When the Fed rate-cutting cycle is over, I don't want to own a spread play with credit risk that's trading at two times book.

      • I am not knocking your stock. How come it does not make
        much money? I see the P/E ratio is 28. Banks usually
        trade in the 11 to 14 range.

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