Tuesday, June 17, 2008

Stocks Update

I don't usually like giving a Stocks Update right before the market closing, but I have some more closed positions I wanted to add (ICE and WYE). I couldn't handle ICE's volatility, and WYE went up 4% today. But as you can see, CNB has been a major disappointment today. I picked up another 250 shares, bringing my total to 750 shares. It's not a major investment, and most of the regional banks went down today (e.g., Regions Financial, etc.), but for the first time, I am starting to have doubts about CNB. It is quite possible it will need to raise more capital due to its mid-2007 acquisition of Citrus & Chemical Bancorporation, Inc. Where is Citrus Bank located, you might ask? (Cue ominous music...) Lakeland, Florida, one of the states affected most by the subprime mess. In any case, my only "major" position continues to be PFE.

Remember the days when banking and pharma companies were "widows and orphans" stocks? Grandma could buy some shares, not expecting any major upswing in price, but collect a consistent dividend check. The banks looked out for the savers back in the day, knowing how many shareholders were depending on their dividends. Now, this unusual economic environment has made savers into buffoons, and speculators into heroes. More important, how long will this unusual market continue? The theoretically risky stocks--like technology, where a company product can become worthless overnight due to failure to innovate--are safe havens, and the theoretically necessary stocks--like banking and medicine--are the most dangerous. There's only one explanation for this--the technology companies, like Intel, acted liked conservative banks, saved their profits and now have very healthy balance sheets. Meanwhile, the banks went loco and decided they were growth companies, Grandma's dividend check be damned. And so it goes.

Update: for what it's worth, here is CNB's response to an email I sent their Investor Relations:

We acquired Citrus and Chemical Bank in December of 2007. As part of the purchase accounting, at the date of acquisition, the assets and liabilities are marked to fair value. This mark would have happen in December of 2007 and therefore has been reflected in our capital ratios for two quarters now. Our board of directors meets in mid July at which time they will vote on the dividend. At this point, we have enough capital to maintain the dividend at its current level of $.095/quarter. We filed an 8k a couple of weeks ago which shows our excess capital and good liquidity position. This material can be accessed from our website at www.colonialbank.com.

Open Positions

CNB = -11.53
EQ = -3.19
EWM = -0.45 (excluded from totals due to insignificant gain or loss)
GE = -4.52
IF = -6.24
PFE = -7.74
PNK = +4.74
PPS = 0 (excluded from totals due to insignificant gain or loss)

Average: losing/negative average of 4.74%

Closed Positions
Held more than seven days but less than one year:
WYE = +2.4%

Held less than 7 days:
ICE (+2.0%), MMM (0.5%), MRK (0.1%), PFE (1.3%), SCUR (15%) (Overall record in this category is a 3.78% average gain)

PFE = +0.5%

Average of all sub-categories, except for Daytrades: up/positive 3.09%

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