All three of these banks hit close to earnings all too often to make me comfortable. But Hudson City was the worst of the lot, hitting within $0.02 for at least the past 6.5 years. What raises an even bigger question in my mind is their string of five quarters in a row of reporting $0.11 in earnings per share a few years ago, followed immediately by a string of seven quarters reporting $0.13 in EPS. Really? Plus, the company's reported growth 18 times out of the last 22 quarters, including every quarter of the last 13. Right through the credit crisis-generated recession. If I were a shareholder, I'd probably be digging quite a bit deeper to see what could be going on. It's the fact that People's United and NY Community didn't report such consistent yearly growth that makes Hudson City's feat more suspicious.
Note that I'm not concentrating on managing estimates here -- though management does that, too. However, if a management team always seems to deliver on estimates time and time again, you should probably dig a bit deeper, to see whether its interpretation of GAAP is getting a bit too fast and loose.
Investors crave consistency. That's one reason why its string of reliable results spurred GE's stock price to rise so much in the 1980s and 1990s. But the real world isn't consistent, and Foolish investors should account for that. If a company's results seem too steady to be true, Fools should proceed with caution.
" If I were a shareholder, I'd probably be digging quite a bit deeper to see what could be going on. "
Lol you right an article and admit you didn't dig whats going on.
HCBK has a very weird business model which makes it very easy to estimate there earnings. Half of there assets are in stocks from the FHLB which is very consistent and they make there NIM on and pay little expenses. The other half of their assets are in loans with high LTV and interest payments making there earnings very stable.
Its pretty simple if you right about things you understand instead of spreading lies.
Yes, this is the only thing I fear about HCBK. Something like this. However their cash flow is always positive, and they bought shares back up until recently, something a company covering something up generally does not do.