Friday, March 11, 2011

MFG: New Day, New Trade...



I wish I had better news to report. My six figure meeting turned into zero, which means I wasted two hours psycho-analysing this company's business. I did learn a lot from doing that analysis and it really is their loss. I'm a great person to work with, even if I have to say so myself - and darn it, I'll say it. LOL.

Anyway, today, I jumped into a new exciting trade. The newest addition to my portfolio is Mizuho Financial Group (MFG). I got in at $3.90 and it's in my Roth IRA.

So here's why they're bona fide Ministers of Finance:

1. If my news isn't old, MFG is one of Lehman's largest creditors. I've been looking to diversify my Lehman exit play since I don't know if my bond ladder is all that great. While I was doing my research, I was so flattered to learn that Mr. Paulson and I are once again in the same boat since he is one of the largest Lehman bondholders. I have such a schoolgirl crush on his glasses it's not even funny. I wonder if he'll also get into MFG - or if he's already in MFG.
2. Net Income as a percentage of revenues = 23.26% (higher than most major US banks and even higher than GS)
3. Quarterly earnings growth = 108.70% (in percentage terms, this is even higher than JPM)
4. 4.44% dividend yield
5. Strong bidding going on in today's action - which is why I jumped today.
6. 5-year chart... I'm watching horizontal price level just above $3.50 or so. The European Debt Crisis excuse caused a brief break below it. I think once Lehman exits from bankruptcy, MFG could wind up testing its 5-year high at $15. Even if the test is at the $10 level, the risk:reward could cause some throw your head back type trading plaisir.

5-Year Chart:





So I've got three hot pots on the stove for Lehman's exit from bankruptcy:

1. Lehman bonds
2. MFG
3. C


Now, if MFG or C will both increase their dividend...

Judging from C's dividend history, a quarterly dividend increase to $0.16 will equate to a 17% dividend yield on my Roth IRA partial position.

Do it, C!

Happy Weekend...


P.S. My portfolio is clearly in need of some more stimulation:

-0.36% SBA
+0.28% Roth IRA

+0.71% S&P
+0.50% DJIA
+0.54% Nasdaq


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