January 14, 2008

New Purchase: US Bancorp

I have made another bank purchase today. I bought US Bankcorp. I think it is a solid company with good management that will face slowing earnings but the value is undeniable.

Banks in general have come under a lot of pressure, some deserved to get annihilated others got taken along for the ride. I think USB is one of the bank that was taken along for the ride. I will post a write up on the bank in the near future.


John said...

Now I have sworn off stock picking and am moving to a balanced index portfolio in the future.)))

But if I was still picking USB would have been my top US choice.
The Wall Street Journal (Dec 24) agrees with you also.


Following is the WSJ view
“U.S. Bancorp, the nation's sixth-largest bank by market value, has the highest rate of return on assets, a gauge of efficiency, among its peer group, according to an analysis by SNL Financial of Charlottesville, Va. U.S. Bancorp also has a relatively small 28% of its loan portfolio in real estate.
But U.S. Bancorp shares are down 11% this year, making them look cheap to bank analyst Lori B. Appelbaum of Goldman Sachs. Ms. Appelbaum recommends U.S. Bancorp, describing the company in a Friday research report as "very defensive," as it has shielded itself through careful loan decisions and large reserves.”

Sami said...

thanks John for the link.

Btw Part of my strategy is to hold a core index portfolio as well. I am just trying to figure the asset classes and weighting so I can but some ETF. I am thinking to cover the following:
International index
Emerging market index
US index
Canadian index

I am thinking to have 40% of my portfolio in it 40% in active selection and 20% in fixed income. The reason is if my stock selection under-performs then I have some exposure to the market. So I really like the ETF approach.