Seeking E*Trade's 'Magic Moment'

by: Cindy Reed May 23, 2008 | about stocks: ETFC    

Cindy Reed

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First a couple of definitions:

The 'magic moment': When a turnaround stock starts to turn vertical, pros call it 'getting re-rated'.

The catalyst(s): Simple, fundamental improvements in businesses (but before the 'magic moment' dawns on the stock price, invisible)

So WHEN is the magic moment? Generally, it's when:

A) the company reports a profit after losses, or

B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or

C) the company's analysts support business actions and trends with positive commentary.

If A), B), and C) -- it's the most powerful combination in the marketplace.

With that in mind, when will the MAGIC moment occur for E*Trade (ETFC)?

E*Trade is well on its way to accumulating its year end target of $1 billion excess cash for a safety cushion (a key difference between Layton and the old CEO: in business, you just can't spend your last dollar on your greatest idea(s)). The environment is improving, that's good, but a safety net is called a safety net for a reason . . . so even though buying back stocks and bonds would be great right now the safety net is more critical.

Recent reports on the liquidation of non-core assets and the execution of 10% cost savings would indicate this $1 billion target will be reached well ahead of schedule, almost certainly by October (Q3) and very likely by the end of July (Q2).

Target cash achievements to date:

i) They already accumulated $695m as of Q1
ii) The pool went up by $260m in one quarter
iii) Now E*Trade is accelerating its non-core assets sale program including selling, last week, its stake in the India venture to HSBC for $145m.

After the $1 billion target is reached, any extra excess cash can be spent on debt/stock buybacks. Both will be accretive to shareholders, which should be the focus, depending on where the prices are by then. At current prices, both E*Trade Stock and Bonds are steals: bonds yielding some 11% and stocks at barely 2x normalized operating earnings. That’s right, barely 2x E*Trade's Online Brokerage arm's income.

In May, The New York Times published an article entitled “A Wish List for Fixing Wall Street,” which highlights Kenneth Griffin’s (Citadel Investment Group founder) insights for Wall Street. It is easy to see that with Citadel and Mr. Griffin providing the financial foundation and direction for E*Trade’s progress, the timing for E*Trade’s MAGIC Moment will most likely be sooner instead of later.

Note: Edited from materials written by Numbersssss

Disclosure: Author has a long position in ETFC

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This article has 54 comments:

  •  
    May 23 09:22 AM
    ETFC will make the leap quickly. Sooner or later the distance from the past management teams errors when combined with their steady progress will catch the attention of the analysts. Analysts are always late anyway, but their tardiness has allowed some of us to accumulate ETFC at bargain prices. I am Long and happy as a clam!
    Reply | Link to Comment
  •  
    May 23 09:37 AM
    Wrong grammar:
    If both A), B), and C) -- it's the most powerful combination in the marketplace.
    Correct grammar:
    If ALL A), B), and C) are correct, it's the most powerful combination in the marketplace.
    *******
    Other than the above grammatical error, the contents of this article are great. ETFC is a treasure in junk yard, given up by men three feet from gold.
    *******
    Cindy, please correct the grammatical error.
    Reply | Link to Comment
  •  
    May 23 10:29 AM
    Welcome to Cindy's daily ETFC pump.
    Have you no shame,did you suddenly discover that SA has no limits on submissions so you're just going to make this into a pumpfest?
    Most other contributers use some discretion in talking their books but you don't even bother to write your own "analysis",y... just troll the ETFC message board begging for contributions to the "cause".
    Sad,really.
    Reply | Link to Comment
  •  
    May 23 11:09 AM
    are we talking about etfc or is this just a cat fight?
    Reply | Link to Comment
  •  
    May 23 11:10 AM
    ON JBMARIA/Shinnick's negative campaign:

    Even worse. Not only that s/he is the one who writes 24/7 negatively on E*Trade in such venues like Yahoo stock message board, but strangely always positively at the same time on E*Trade's competitors, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!

    So JBMARIA,

    Do you mislead message/blog boards when you say you "hold" ETFC?

    Do you actually short ETFC?

    Do you hold SCHW or any of E*Trade competitors' stocks?

    Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
    Reply | Link to Comment
  •  
    May 23 12:25 PM
    Readers should know the background of this "catfight" to help them value the information.
    Here's some links to the original thought that Cindy is trying to pass off as somehow her own and another to the debate it's spawned:


    messages.finance.yahoo...

    messages.finance.yahoo...
    Reply | Link to Comment
  •  
    May 23 12:31 PM
    Even worse Cindy,it ain't working.
    You've tried six articles since April 18 to prod the stock and the price remains where you began,seemingly moribund at $4.

    Look at your wasted efforts:

    Cindy Reed's Latest Articles
    Seeking E*Trade's 'Magic Moment'
    on May 23, 2008 about ETFC
    E*Trade: What the Analysts and News Haven't Told You
    on May 22, 2008 about ETFC
    Schwab, E*Trade: Monthly Activity Comparison and the Industry Average
    on May 15, 2008 about ETFC, SCHW
    E*Trade's Annual Shareholder Meeting Should Pressure the Shorts
    on May 09, 2008 about ETFC
    Comparative Price Shopping: Selected Banking, Mortgage and Brokerage Stocks
    on Apr 21, 2008 about BSC, CFC, ETFC
    E*Trade: Primed To Turn Around?
    on Apr 18, 2008 about AMTD, ETFC, SCHW
    Reply | Link to Comment
  •  
    May 23 12:43 PM
    Well, Yahoo Finance is the playground of the insane, so Cindy you might want to just stay here. I have tried the public 'discussion' boards too, but the flood of wannabee investors who own less than 500 shares of anything just turns any post into a pointless argument.

    Good article, and jbmaria you added little but vitriol in your posts. Might want to stick to something you have some knowledge of, but you are not adding a lot of information. On second thought, stick with Yahoo Finance, that seems to suit you.
    Reply | Link to Comment
  •  
    May 23 12:44 PM
    JB, are you jealous? You are king of cut and paste on the Yahoo message board. You are the last person that should accuse Cindy of regurgitating other people's posts.
    Reply | Link to Comment
  •  
    May 23 12:44 PM
    C'mon JB, Cindy already posted the link to the original message in this editorial. Look for this text at the bottom "Note: Edited from materials written by Numbersssss ". Notice it's a link. What's wrong with you? Cindy isn't trying to mislead anyone.
    Reply | Link to Comment
  •  
    May 23 01:13 PM
    Thanks JB for the list of excellent articles posted on SA by Cindy. Makes it easy for others to get the true information without a lot of search. Meanwhile, since you are on IGGY'd in the Yahoo message board, are you still employed by AMTD, SCHW and/or other ETFC competitor? Please post some real information that shows why any of Cindy's posts or her contributor's information is false. I would very much like to see a PLAUSIBLE argument against rather than copied posts validating her position or name calling, reputation bashing, etc. Bring on the facts, only the facts ma'am/sir please.
    Reply | Link to Comment
  •  
    May 23 02:36 PM
    Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. I think E*Trade could well burst through the $5 in the near term, however I still don't predict it to get any where near the "mid-teens" as many have predicted.
    Reply | Link to Comment
  •  
    May 23 05:35 PM
    Jimmy Goodwin
    May 23 02:36 PM
    Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
    *******
    Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets.

    Numbersssss is "wishing" for this to occur:

    "So WHEN is the magic moment? Generally, it's when:

    A) the company reports a profit after losses, or

    B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or

    C) the company's analysts support business actions and trends with positive commentary.

    If both A), B), and C) -- it's the most powerful combination in the marketplace."

    *******
    Well hell,if ETFC hits this trifecta,I get bullish too.
    But where's the evidence any of this will occur?


    Profits and massively improved cash flows in Q2???

    As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend downward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
    SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:

    seekingalpha.com/artic...


    Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.

    Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.

    Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.

    Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
    And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
    Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
    Curious!

    At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!

    I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
    If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.


    I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.
    Reply | Link to Comment
  •  
    May 23 05:55 PM
    What is JBMARIA's agenda???

    Not only that s/he is writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!

    So JBMARIA,

    Do you mislead message/blog boards when you say you "hold" ETFC?

    Do you actually short ETFC?

    Do you hold SCHW or any of E*Trade competitors' stocks?

    Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
    Reply | Link to Comment
  •  
    May 23 06:08 PM
    Etrade now has better management and it appears they are now headed the right direction. I have both my investment, IRA and Bank accounts with them. They treat their customers well and that's half the battle. I like them and would considering buying their stock to keep lesser quality companies from buying them on the cheap and ruining them.

    Dave
    Reply | Link to Comment
  •  
    May 23 06:11 PM
    jbmaria,

    again, sell on an investment is just moving money around to better position an investor, there should be little concern over that and we all know why etfc wants more cash and less debt.

    50mil per q for interest is nothing compares to schw's per emp cost which puts etfc in somewhat of an adventage over schw and the market certainly rates etfc much lower due to the recent cry wolf.

    i was going to talk about everything you wrote, but i'll just generalize as "if there's no risk at all, this won't be an investment and you have the right to be concern but don't scare yourself nor cry the sky is falling as we discuss tomorrow's possibilities"

    one thing i like is that layton's pay is tie to the stock value and he is not meeting too much resistance in his executions.



    Reply | Link to Comment
  •  
    May 23 06:13 PM
    JBMARIA, you can run but you can't hide.

    Are you an agent/paid basher for Chuck? if for Chuck, tell us again you are positive on the substantial losses of their fund but at least disclose to their fund investors the fact that you promote for Chuck and attempt to depress anything Chuck may want to buy:

    messages.finance.yahoo...

    Or,

    Are you an agent/paid basher for Joe? if for Joe, any comment/insight as to why AMTD customers keep complaining about the frequent outages of their trading platform? for latest, see this

    messages.finance.yahoo...

    oh, if for Chuck, answer the same question why they are snails but no need on AMTD outages:

    messages.finance.yahoo...
    Reply | Link to Comment
  •  
    May 23 06:51 PM
    Corrected version;

    Jimmy Goodwin
    May 23 02:36 PM
    Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
    *******
    Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets.

    Numbersssss is "wishing" for this to occur:

    "So WHEN is the magic moment? Generally, it's when:

    A) the company reports a profit after losses, or

    B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or

    C) the company's analysts support business actions and trends with positive commentary.

    If both A), B), and C) -- it's the most powerful combination in the marketplace."

    *******
    Well hell,if ETFC hits this trifecta,I get bullish too.
    But where's the evidence any of this will occur?


    Profits and massively improved cash flows in Q2???

    As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
    SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:

    seekingalpha.com/artic...


    Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.

    Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.

    Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.

    Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
    And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
    Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
    Curious!

    At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!

    I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
    If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.


    I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.


    Reply | Link to Comment
  •  
    May 23 07:11 PM
    Just out for those who think headline risk is over in housing:

    www.marketwatch.com/ne...
    Reply | Link to Comment
  •  
    May 23 07:29 PM
    Still waiting for JBMARIA's straightforward answers.

    What is JBMARIA's agenda???

    Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!

    So JBMARIA,

    Do you mislead message/blog boards when you say you "hold" ETFC?

    Do you actually short ETFC?

    Do you hold SCHW or any of E*Trade competitors' stocks?

    Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
    Reply | Link to Comment
  •  
    May 23 07:44 PM
    amended version;

    Jimmy Goodwin
    May 23 02:36 PM
    Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
    *******
    Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,I'll explain.

    Numbersssss is "wishing" for this to occur:

    "So WHEN is the magic moment? Generally, it's when:

    A) the company reports a profit after losses, or

    B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or

    C) the company's analysts support business actions and trends with positive commentary.

    If both A), B), and C) -- it's the most powerful combination in the marketplace."

    *******
    Well hell,if ETFC hits this trifecta,I get bullish too.
    But where's the evidence any of this will occur?


    Profits and massively improved cash flows in Q2???

    As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
    SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:

    seekingalpha.com/artic...


    Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.

    Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.

    Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.

    Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
    And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
    Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
    Curious!

    At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!

    I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
    If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.


    I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.

    Reply | Link to Comment
  •  
    May 23 07:54 PM
    Still waiting for JBMARIA's straightforward answers..

    What is JBMARIA's agenda???

    Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!

    So JBMARIA,

    Do you mislead message/blog boards when you say you "hold" ETFC?

    Do you actually short ETFC?

    Do you hold SCHW or any of E*Trade competitors' stocks?

    Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
    Reply | Link to Comment
  •  
    May 23 07:55 PM
    re-amended version;

    Jimmy Goodwin
    May 23 02:36 PM
    Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
    *******
    Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,let me explain.

    Numbersssss is "wishing" for this to occur:

    "So WHEN is the magic moment? Generally, it's when:

    A) the company reports a profit after losses, or

    B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or

    C) the company's analysts support business actions and trends with positive commentary.

    If both A), B), and C) -- it's the most powerful combination in the marketplace."

    *******
    Well hell,if ETFC hits this trifecta,I get bullish too.
    But where's the evidence any of this will occur?


    Profits and massively improved cash flows in Q2???

    As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
    SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:

    seekingalpha.com/artic...


    Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.

    Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.

    Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.

    Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
    And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
    Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
    Curious!

    At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!

    I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
    If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.


    I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.

    Reply | Link to Comment
  •  
    May 23 08:19 PM
    Still waiting for JBMARIA's straightforward answers...

    What is JBMARIA's agenda???

    Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!

    So JBMARIA,

    Do you mislead message/blog boards when you say you "hold" ETFC?

    Do you actually short ETFC?

    Do you hold SCHW or any of E*Trade competitors' stocks?

    Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
    Reply | Link to Comment
  •  
    May 23 08:23 PM
    elfin version;

    Jimmy Goodwin
    May 23 02:36 PM
    Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
    *******
    Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,I'll explain.

    Numbersssss is "wishing" for this to occur:

    "So WHEN is the magic moment? Generally, it's when:

    A) the company reports a profit after losses, or

    B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or

    C) the company's analysts support business actions and trends with positive commentary.

    If both A), B), and C) -- it's the most powerful combination in the marketplace."

    *******
    Well hell,if ETFC hits this trifecta,I get bullish too.
    But where's the evidence any of this will occur?


    Profits and massively improved cash flows in Q2???

    As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
    SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:

    seekingalpha.com/artic...


    Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.

    Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.

    Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.

    Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
    And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
    Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
    Curious!

    At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!

    I'm not going to pretend I know what either ETFC or Citadel is up to but unlike the pumpers I won't assume it's purely coincidental and /or innocent toward shareholders.
    If nothing else it adds a huge dose of uncertainty to the equation and we know how uncertainty is treated by Wall Street.


    I have more concerns but for now I think you can see my caution on ETFC as an investment is quite logical.

    Reply | Link to Comment
  •  
    May 23 08:39 PM
    What is JBMARIA's agenda?

    Not only that s/he writes 24/7 negatively on E*Trade in such venues like Yahoo ETFC message board, but strangely positively on E*Trade's competitors on the discussion boards of E*Trade, even positively on the Schwab fund that a lot of their investors are now alleging being misled and suffer substantial losses, yet JBMARIA also claims that s/he HOLDs E*Trade shares!

    So JBMARIA,

    Do you mislead message/blog boards when you say you "hold" ETFC?

    Do you actually short ETFC?

    Do you hold SCHW or any of E*Trade competitors' stocks?

    Do you work, or in the loose sense of the word "work", for one or more competitor(s) of E*Trade and manufacture all your negative posts for some hidden agenda, like an attempt for E*Trade's competitor to acquire E*Trade on the cheap?
    Reply | Link to Comment
  •  
    May 23 08:47 PM
    special stalker version;

    Jimmy Goodwin
    May 23 02:36 PM
    Up to now I've been against the vocal bulls of this E*Trade movement, but I must admit Cindy has finally come with some solid facts and logic here. "
    *******
    Ok,Jimmy,why don't you enumerate the "solid facts" that impress you so much. What I see is mostly wishful thinking and alleged progress toward targets,I'll explain.

    Numbersssss is "wishing" for this to occur:

    "So WHEN is the magic moment? Generally, it's when:

    A) the company reports a profit after losses, or

    B) the company's cash flows have improved so much that it finally can use its internal cash to pay down debt and/or buy back stocks, or

    C) the company's analysts support business actions and trends with positive commentary.

    If both A), B), and C) -- it's the most powerful combination in the marketplace."

    *******
    Well hell,if ETFC hits this trifecta,I get bullish too.
    But where's the evidence any of this will occur?


    Profits and massively improved cash flows in Q2???

    As I see it,there's no guarantee that last Q's noted improvement in the loan portfolio won't reverse.Macro trends in housing and incomes don't indicate to me any clear improvement in the mortgage holders lot,delinquencies and defaults continue to trend upward.And the Fed may be out of bullets.I don't know how bad it might be or become but ETFC has around $40 Billion in loans that could get in some degree of trouble.
    SA author,R. Middleton has written a comprehensive series on the crisis and other articles I highly recommend,read everything he offers if you want to temper your outlook with some intelligent caution:

    seekingalpha.com/artic...


    Some other cited issues are asset sales,like the Indian deal just announced. OK,they get the $145m but they lose the rev. and profit going forward and this from a co. that recently was selling themselves as an international player.

    Further,they will be paying over $50 million per Q interest to Citadel ,a nasty drag on potential profits.

    Exiting the mortgage origination biz. Sounds good given the aura surrounding mortgages but recall this was once probably their biggest moneymaker,now gone for the conceivable future.And let's not forget it's expensive to exit a biz line,severance packages and all that.

    Debt for equity swaps. Yes,they take debt off the books,a good thing but they are dilutive to shareholders.
    And speaking of dilution,keep in mind the recent authorization of 600 million shares by management.
    Those pumping ETFC would have you believe that mgt. just ran out of authorized shares for routine corporate purposes like ESOPs and debt for equity swaps.Maybe, but did they need to double the existing 600 million shares,seems like they have something in mind that a more modest 1-200 million shares might not cover.
    Curious!

    At the same time,Citadel registers for "potential" sale over 90 million shares it got for lending ETFC $1.9 Billion at 12.5 % last November. It also registers this debt for "potential' sale at the same time as the share authorization. Curious!

    I'm not going to pretend I know what either ETFC or Citadel is up to but u