In the past week there has been a lot of talk about Lehman Brothers in the news. With the issues going on in the financial sector, it’s no surprise that Lehman would be the week’s star. Lehman’s price per share has dropped 61% since June when it received $4 billion in raised capitol. Now it seems that they are out trying to get more capitol for save the company. Last month it was a Korean development fund that they were trying to convince. At this point all indicators are showing that Lehman is ripe for a hostile takeover. The stock is trading at $13 at a time when Lehman’s book value is at $34. An analyst from Ladenburg Thalmann Dick Bove, upgraded Lehman Brothers to “buy” because of the fact that the firm has become a candidate for a hostile takeover.
It is also expected that they will have more losses in this quarter again. Most likely it will be below the street’s expectations. One Goldman Sachs analyst expects write-downs to the tune of between $2.5 billion and $3.5 billion during its fiscal third quarter
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The financial sector has been riddled with one bad news report after another and I believe that the time for picking up shares of certain banks and brokeage firms is just about here. I’m looking at a few of them right now and because of the last few days of news on Lehman Brothers I moved them to the top of this list of “stocks of interest”.
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Remember when I wrote about the Fannie and Freddie on 7-14-08 on the infusion from the Feds, the stocks of both companies jumped 30%+two days later. I have that same feeling on Lehman as I did with the other two. I’m waiting to see some more news on them this week, but I fell that decision needs to be made before the close on Wednesday. If you have any insight on this trade or just some news that I may have missed, please leave me a comment.
Tags: Financials, NYSE, Stock investments
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