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BB&T Corporation Message Board

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  • nobankersplease nobankersplease Jul 15, 2011 12:29 PM Flag

    Att: nobank & boat.

    As you asked:

    I am only going to buy the yield.
    Loan Loss reserves are a paper drill. Meaningless. Loan growth is not robust. Acquisitions would be nice, but other than Colonial (not a home run), I have not seen anything. Dividend increases will come, but not sure when and in what amount. I look at what my risk should be in owning this bank at its current yield agaisnt what i can get owning either an equivant maturity treasury or even gold. Right now I would certainly expect to get more than 2.5% for owning a stock that is still highly risky. I think you will see an $0.80 or better dividend going forward. (that will be the first incremental step back to $1.50, but that will take years). Given my expectaiton of the dividend, and assuming I want to lock in a yield at 4.5% or better for now, I would not pay over $18. Oddly, my investment criteria for owning the bank is similar to the way the bank views its own credit. It wants a lower price (ie. more collateral) and a higher yield. The bank cannot have that and perhaps neither can it any wonder our entire eceonomy is in a state of limbo?

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    • Thank you nobank. Think you have it right. You do know that the old dividend (2008) was $1.88. Your forecast of $1.50 ain't no big deal. Thanks anyway. Let me know when you buy the banks.
      Thanks again.

    • "Given my expectaiton of the dividend, and assuming I want to lock in a yield at 4.5% or better for now, I would not pay over $18."

      Sell price for a january 2013 put is $1.12 per share at $17.50 strike. There's your trade. I've been doing it on both bbt and usb at these levels.

      The math is simply - bbt normalized earnings are $4.50/5.00 share. Don't think you'll ever get the opportunity to go long bbt at $18 which is close to their current tbv.

      Next week I think you and many other folks will be surprised that their delinquencies are quickly approaching a normalized level. Plus, their loss severity rates will start to approach zilch on 09,10,11 defaults so their losses will be very small.

37.88+0.40(+1.07%)Oct 31 4:02 PMEDT

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