September 16, 2008

CONSIDER BUYING BAC (BANK OF AMERICA)

Strategic value of MER outweigh potential loses from MER balance sheet. BAC has traditionally done a good job at integrating acquisitions, but MER is a different animal than traditional commercial bank acquisitions. However, our review shows that more likely than not MER will be successfully integrated in BAC and strategic synergies will be fully realized.

BAC has had difficulties with meaningful international expansion. MER also solves this problem.

Consider tip-toeing right here and adding aggressively in low to mid twenties.

… Please click here or the title below to read more.

September 16, 2008

CONSIDER BUYING BCS (BARCLAYS)

We believe BCS purchase of Lehman assets in bankruptcy is a coup. This is a major change as it will significantly increase BCS presence in US. The current financial crises will pass and the assets bought cheap will pay rich dividends. Consider scaling in in $22-23 range and add on dips.

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September 16, 2008

HOLD SNDK (SANDISK) LONG POSITION

After the close, Samsung announced $26 cash bid for SNDK. The offer is not contingent on financing.

We believe there is a distinct possibility of a competing bod from Toshiba. On the other hand there is some antitrust risk in Samsung bid. On balance, we believe it is advantageous to hold the long position.
In our last post we suggested selling 75% of long position to lock in profits per our methodology. If you followed our methodology, during the recent pullback you have added to SNDK position in $14 range. On the other hand, some stops should have hit. On balance, an investor following our methodology should have about 25% of their standard position size as long.… Please click here or the title below to read more.

September 16, 2008