Did you all notice on CNBC that an analyst or money manager featured NYB as one of his top picks going forward. I don't know if he speialized in the financial services sector or some other medium. I am not used to seeing NYB recommended on CNBC with all their hype for tech, etc. At least someone else likes NYB besides me.
For me, I own it for several reasons:
1. I, unlike others, like their managment and believe they will continue to create value for shareholders by maintaining the dividend, eventually increasing that dividend, and by slow but steady price appreciation through their "growth by acquisition strategy," whereby they buy banks that are underperforming on the cheap, which are immediately accretive to their (NYB) earnings.
2. Like you stated, the New York City real estate market is significantly better than most other markets of the USA and this geography lends itself well to NYB's niche market.
3. Regarding tangible book value and their present earnings not supporting the present dividend, they have repeatedly stated that earnings alone are not the only metric calculated to pay out their dividend (they also use retained earnings, tangible equity, etc..) and therefore management feels very comfortable with continually paying out the present dividend while "they wait" for their earnings to "catch-up" and fully support the dividend alone.
4. I appreciate your reasons and sincerity in shorting the stock and I have cogently presented my reasons. However, for anyone to say that this bank maybe going bankrupt now or in the future is quite responsible and perhaps that statement caused me to deviate from pure reason to a little emotionalism on this stock.
Good luck to you, on your postion, and let us see what happens for the next 1-2 years, relative to stock appreciation and dividend payouts.
to a higher level.
by a "numbers guy" i mean simply looking at the stock price relative to tangible book and franchise value, and the degree of leverage that could negatively or positively affect the value going forward.
nyb seems stretched and a quarterly cash dividend drain of $80 million is a tough nut in this environment.
as a bank investor i've typically tried to buy franchises as cheaply as possible. in the old days i could buy below tangible book meaning that the market was actually paying me to take the franchise for free. that worked great but the bargains disappeared...the game was too obvious.
i understand that the nyc market is a lot better than podunk. but the whole banking world is becoming more competititve and franchises seem to be less valuable.
based only on what i see on nyb's balance sheet and their strategy of building tangible assets via acquisitions for stock i really don't see a value proposition or any compelling reason to own it. so much so that i am a comfortable short inasmuch as i can't see them being taken over in this environment and that, even if they were, it would be more likely than not (imo) that the takeout price would be lower, not higher than the current stock price.
good luck on your side.
Sorry if I came across angry. On the contrary, I just wanted to matter-of-factly state at what price I bought NYB stock at, and learn, in turn, what price you shorted NYB stock at ("trivia"), since you state that you are a "numbers guy." Therefore, I assume you use "numbers" such as stock price, TBV, dividend pay-out ratio, price of shares sold short and percentage of shares sold short, etc... to determine the value in holding or selling the shares.
No, I am not the president of the company (NYB) just a shareholder with a long-term perspective who aims to achieve dividend income and slow but steady share price appreciation.
If you read my prior posts, you will note that I explicitly explained the "value proposition" of owning NYB shares.
My cost basis is $17.09/share (beginning on 8-5-05) minus the $2.00 in dividends I have or will have received, leaving me a cost basis of approximately $15.09/share with the cost basis continually going down, down, down.
I appreciate you sharing the price that you shorted NYB stock and now, for the record, we can compare my price in holding versus your price in selling.
In the meantime, I look forward to receiving from you, the $.25 dividend, come November of 07 (when you sell short you pay the dividend to the long-term holder).
Until then, or sooner, good luck on your short sale of NYB and you keep in touch, as will I.
Big K nice play you made. Like I said it is just a stock. One I fell I can tuck away and sell CC on and buy puts without wasting time worrying about which way the market will go. Something I did to another bank HBAN in the early 70s and just held on to for the next ten years. It was that single re invested stock that financed my families move from the mainland to where we live today. Hawaii. It also covered my first year of income in the Islands while settling down.
the company announced that they will have a big profit selling their atlantic bank building. that profit will not nearly cover another $.25 dividend.
just suppose they do cut or eliminate the dividend in october (they have not been earning it, even before the subprime crisis) in the face of all this trouble. where does the stock trade then?
so what's the point of owning it?
Big K or little whichever the case may be. Each investor has their own portfolio and way to play the game. No two are the same. NYB is only one of my holdings.
In 16.19 plus 1.00 dividend plus CC = for as long as I keep selling CC. And when I am called out I am still way ahead of the game. Then just move on.
Never get married to a stock.
swan.....your post..."it just seems like a blessed time to unload the junk and swap into some quality. pick your own but maybe buy citicorp or b of a."
can u explain your reasoning for c...quality pick makes me chuckle
(BTW...hasn't been called citicorp in years)....big bank = big hit on the balance sheet w/ current financial turmoil
you're so hostile, like i disparaged your wife or accused you of something. it's just a stock.
as i said, i continue and will continue to establish a short position, mostly in put options (actually i am long 17.5 puts for next year and '09 and actually short some september 17.5 puts. so, like you, i hope the stock will hold up for now. the dividend, if it continues, shrinks or grows, will always work in my favor.
why anyone would want to own this stock in a financial crisis is beyond me. but, as i say, good luck with your investment and may i suggest an anger-management course?
no need to answer.