Yowsers... Regions Financial (RF) is in a free fall. It is only a 0.2% position but it's just ugly. I bought this stock in my original Marketocracy.com portfolio as a "stronger regional bank" proxy so I had something when the Kool Aid was thick in the air that financials were "about to turn around". So I brought it over to the new porfolio at the beginning of the month.
For that, I am already down 30%+ in this name; only $1200 or so in real terms (about -0.1% of performance) but now that it is under $5 its become a speculative stock in a speculative sector. I guess the new darlings are the Morgan Stanley's (MS) or such. Regions was actually a bank that the FDIC handed a failing bank to, so in theory they should not be in "this" bad of shape. I can only assume that if Obama does this bad bank fairly the common shareholders should be diluted to a massive level... without any details who knows. But the risk level/speculative properties have now passed my threshold.
- Regions Financial Corp (RF) may slash its dividend by 90 percent and there is no likelihood of the company's earnings turning positive in 2009, veteran banking analyst Richard Bove said.
- The Ladenburg Thalmann analyst cut his price target on the shares of the large U.S. Southeast regional bank to $7 from $14. Bove forecast a 2009 loss, compared with his prior profit view, and lowered his 2010 earnings estimates for the company.
- Bove, however, maintained his "buy" rating on the stock and said the bank retains the best franchise in the Gulf States, while states like Alabama, Tennessee and northern Florida continue to offer superior growth prospects.
If this is how they treat the "best franchise" in the area.... I'd hate to see what must be going on in the bad franchises.
I have Ultra Financial (UYG) to do the same "proxy" job as RF so I'm going to close out this mess of a position. These bank stocks can double in 3 days or drop 50% in 3 days - fun if your timing is perfect, but not for me.
Long Ultra Financial in fund; no personal position
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