US Bancorp Added
I added a position in US Bancorp (USB) to the Fat Pitch Financials Portfolio today. My order for 2,940 shares of USB was filled today at a net average price of $34.0417 including commissions and fees according to Marketocracy.
As you might remember, I valued US Bancorp at the end of March. The more I’ve read about USB since then the more I like the business. I was hoping that last week’s market tumble would have dropped the price of USB shares a bit more. I would like to have gotten a wider margin of safety on this one. However, I still think USB will be a solid performing component of the virtual portfolio I maintain for Fat Pitch Financials as well as my own account.
By the way, you can now follow the performance of the Fat Pitch Port as well as the Special Situations Real Money Portfolio by scrolling to the bottom of the left sidebar on Fat Pitch Financials. I’m still tweaking the performance metrics that I should include in this continuously updated sidebar item. Your comments are welcome.
Full Disclosure: I own shares of US Bancorp.
I looked long and hard at USB. I was tempted to pull the trigger, however I held off after looking at their earnings for the last ten years. Especially 2001-2002. Made me remember that banks ARE cyclical, and buying at the top end of the cycle doesn’t make sense for me.
However, USB is a top notch company, and should a downturn in the credit cycle arise, I will be buying and buying big.
Comments?
Hi Steve,
You make some good points regarding the somewhat cyclical nature of banks. I think US Bancorp may have learned from the 2001-2002 period. I too would join you in buying USB should there be a further downturn in the credit cycle that impacts USB. I still have a significant amount of cash waiting to be put to work.
The reason why I decided to buy now is that I think the market is already pricing into the stock the potential for a downturn. If the downturn doesn’t materialized or is relatively mild, US Bancorp shares should significantly outperform. In the meantime, I’ll collect the dividend.
Your rentention rate on your valuation is WAY off. Read he annuals. This is a good bank at a fair price. Not a bad invesment.