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Bank stocks are in the toilet, so I bought some...

July 16th, 2008 at 07:52 pm

When the market tanks, I like to think of stocks as being on sale. Most of our money is in Vanguard funds, but we do have some money we use to buy individual stocks.

So, since they were so cheap, I bought 100 shares each of Huntington Bancshares (pd $4.50/share) and National City (pd $3.50/share). I am very familiar with the operations of both of these banks, thanks to my job.

For very little cash outlay, I picked up 100 shares of each. I figure at these prices, I won't lose too much if they go down more, and if (when) they go up, I could stand to make quite a bit. The key is to sit tight and let the market work out the kinks.

6 Responses to “Bank stocks are in the toilet, so I bought some...”

  1. baselle Says:

    Good luck! Do they have a dividend, and if so, are you going to reinvest them?

  2. Broken Arrow Says:

    Congrats!

    If you don't mind me asking, how did you find these banks, and what made you decide to invest in these instead of others?

  3. thriftorama Says:

    They do have a dividend, but it's a small one. In this case I decided not to reinvest them, they're so small it'd take forever to get another whole share.

    Broken Arrow! Where have you been? To answer you, I live in Ohio and both of these banks are based in Ohio and have a large presence in the Midwest. As part of my last job, I covered both banks' quarterly earnings and operations, so I feel comfortable spending a couple hundred dollars to pick up bargain shares. To me, it seems a good risk.

    Huntington has good solid operations and a conservative but market appropriate business model. National City took more loan risks, but would likely be an attractive acquisition for a larger bank. So we'll see!

  4. Broken Arrow Says:

    I'm still around. Mostly lurking nowadays. Big Grin

    What a wonderful way to make your picks! Thanks for sharing.

  5. baselle Says:

    Hmmm, interesting. I took another look.

    HBAN (assuming that's the ticker) is paying out .53/yr/share, which works out to be .13/qtr/share. Assuming they maintain their dividend, with 100 shares that would mean a $13 quarterly dividend, and if their price doesn't start shooting up, that would mean about 2 shares/quarter at the current price. Of course if reinvestment is a hassle with a lot of fees...and you want to take the $13 for the tiki fund, that's another matter. Big Grin

    I would have to agree with you on NCC - at .04/yr/share, that would work out to be .01/qtr/share, with 100 shares that would mean a $1 quarterly dividend, or about 1 share per year.

  6. thriftorama Says:

    I'd rather use the cash to buy a different stock. Plus, I suspect HBAN might be cutting that dividend at some point.

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