Merrill Lynch &
Co., Inc. (NYSE:MER), the Next Hedge Target?
Falling 16% today was Merrill Lynch & Co (MER) to a new
52 week low as investors drive the shares down on fear of yet another
investment bank not being able to survive.
Fundamentals are a
very many fundamental indicators that are attractive for Merrill Lynch at this
time excluding the current dividend yield which will probably not be paid. Yearly
revenue growth is negative, past earnings announcements have been missed the
last two quarters, and current earnings estimates have been slashed from an 84
cent profit to a $3.89 loss in 90 days.
Credit Crisis End not
Is it really possible for another
investment bank to be taken down by the shorts into a panic selling mode where
everything is shed in hopes of surviving? In this credit crisis environment, it
seems even some of the biggest financial companies aren’t safe. If a company
used too much leverage in the easy credit years like Bear Stearns, Lehman
Brothers (NYSE:LEH), Freddie Mac (NYSE:FRE), or Fannie Mae (NYSE:FNM) and are not
able to finance their current balance sheets, there is a chance they will be
forced to close it now appears.
have been a capitulation day with volume over 3 times the normal level for the
past three months. If this is the case and the stock reverses tomorrow, wait
until there is a negative day of lighter/more normal volume before taking a