I heard the same things that you heard! The analysts are killing all bank stocks. BB&T getting hurt worse than others even though results and expectations are much better (comments from Allison).
Well, I listened to the conference call, and I didn't notice any more serious problems than its counterpart banks are experiencing. Indeed, I think BBT was actually more prudent in many of their decisions relative to their rivals, e.g, little sub-prime exposure. Also, they are in better market areas than many others. Lastly, home equity loans are currently being paid off.
In sum, this bank seems to be a lessor evil than many of the others.
1)Unclear future guidance
2)Inability to adjust to challenging market conditions
3)Trouble with TX acquisition
4)Overpaid on ATL deal
5)Letting this bad deal influence future acquisition strategy
7)Capital markets business
8)Non-growth in insurance business which they've been rapidly growing over past 5+ years
Agree! Just picked up 500 shs @ 37.50, no commish thru Vanguard brokerage and plugged in a limit sell @ 41.50.
Did the same thing between July 23 and Sept.18; nice way to pick up some trip cash on the trading range.
Just wait small bear, could be $35 by the end of the month...its the outlook for the dividend that will utlimately spook people. The rate of change of the annual dividend increase has slowed year over year, as BB&T's internal operations can no longer support the big increases (i.e. their strategy has run out of gas). With the anticipated earnings compression, it will be intereesting to see what their dividend looks like going into '08. The stock coud be repriced into the 35 range if the annual change does not appear to be very attractive. Again, remember, you are buying a bond investment....you know what the yield is, just how much are you willing to pay for a fixed rate coupon.
We could see 35, but it'll be an unexpected event to trigger it. I think you're wrong about the rate of change of dividend increases year over year.
My increase was .03 per share in '99, moved to a .04 per share increase in '06 and continues at a .04 increase in '07. The percentage increase is declining as earnings grow, but the cents paid per share has only increased over my 41 years holding the stock.