Oct 25, 2012|
Motley Fool's Joe Magyer
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Welcome back to. The financial exchange it is time for stock talk we're joined by Joseph -- gear from the Motley Fool Joseph are you doing. There are good. -- first stock -- today this is a doozy I wish it had on yesterday though UPS up two bucks today. Galloped off to a nice start on a bad day I guess that's what happens when you post mediocre results when people are expecting. Very got one. -- all -- -- kind of sidestep in the short term. UPS is a wonderful business and it is incredibly well positioned to grow over time that's basically. Operate in a very condensed market where only competing with FedEx and ample other players. Here and abroad and you can really keep the strength of the yes network and brand. Here in the US when you look at what's happened not just with the Postal Service but with DHL which beat the decision appears to go to back out of the market. And DHL being. -- very well funded experience. Global competitor and it just shows how strong the company it is that they would back out. It it's interesting because you look at UPS and they're up a lot but Dave said -- were kind of pessimistic about 2013. They're not yet their their guidance. Going into 2013. Was was pretty soft and. Yeah I -- soft and obviously it's a little bit disconcerting but I still think that ultimately you've got two things worked in paper one at that. Most stocks right now on the market or near 52 week high and you yes not that there's already an expectation of a recession -- and on the second thing is you get an ice. 3.2 percent dividend -- a back stopping you. Year and it keeps you. A good -- of adequate protection put a page you away while the pieces -- -- Well you don't have to rush out and sell it because you can just live off the dividend. And that's not bad strategies -- Yeah I mean 3.2 percent doesn't sound amazing you know you've been in the market for a long time but in the context of where yields are -- with a ten year treasury at one point 8% that's pretty attractive. We'll tell us about the evil empire you like Goldman Sachs their 119 dollars a share their role in the opposite direction this morning they're down three dollars and twenty cents. I think of Goldman Sachs and I think a Darth Vader in the evil empire. Well you may not be entirely outpaced there the appeal for Goldman to mean. Is two fold one it that it selling right now at a discount tangible book value which basically means that your client at at a discount. To its. Liquidation value in an orderly fashion. What that means is basically getting Goldman's most -- -- that were people brand reputation also free. And it's very unusual. Few profitable business mostly what the history of profits -- below its liquidation value. So in this case you know I know that. Goldman has an error but. I've just -- just as a classic value opportunity -- by kept at the franchise at a very cheap price. Not concerned about litigation issues -- Dodd-Frank and some of the regulatory challenges that they face. Yeah I think those are all valid and I think that especially Dodd-Frank. You know for westerners are familiar it's basically got to restrict the amount of leverage it Goldman can use in the united. Proprietary trading that they can do to basically there will be able to operate as a hedge fund anymore. Those are valid concerns but we divided -- discount tangible book is still basically pay nothing for any upside there and even at Goldman. And it's just post they tend to 12%. Equity you know but still a lot of upside to current stock price. It sure is Ari what Joseph thanks very much for your text per share. Joseph mag your Motley Fool has to stock picks UPS and Goldman Sachs symbol for Goldman Sachs is G yes. We told you that there was a bank for sale oxide and tell me more Citizens Bank. As for sale but also the citizens and who isn't that are you into our citizens we -- by Citizens Bank. -- they're denying it but RB yes. Chief executive Stephen Hester. Said that they're they're gonna consider selling Citizens Bank -- 81%. Of Citizens Bank. And the reason they're gonna sell it is there in deep from the eighties the RBS's Royal Bank of Scotland. And they need cash and if they sell Citizens Bank they think they can probably get. Twelve maybe fourteen billion dollars for citizens who would -- Citizens Bank partly right at the top of your head as anybody coming -- in mind to banks. Our potential acquirers. He tell you which is Gisele spank right here is seen the commercials for Malia -- -- Randy is a model we have -- Tom Brady's go lucky guy. That's all I don't put Brazil this woman you know I was so there there will oh probably the lead to bank that's interested in acquiring. Citizens Bank the other one though which I think. It is also. Right up there in the lead is Toronto Dominion Bank so interesting it's probably it's owned by foreign entity now Royal Bank of Scotland. And it's probably going to be owned by a budget conducts. Or -- -- Brazilian and to maintain its TD day that's it that TD bank. So what they would do is I would I suspect is they would envelop. Citizens Bank you'd be taken over by TD -- all those branches that you have right now. With Citizens Bank would become TD bank's. And I used to be if you were call. Number banknorth. Yes I -- that was a big Boston Brandenburg -- bank. Well that's book that became a bank that was acquired by an Australia. Which became Bankboston which became fleet bank which became Bank of America. So banknorth. Was acquired by TD bank it was initially -- if your -- TD banknorth. And then it became TD bank. And now citizens. You could anticipate it is nothing official announcement this does is just. Speculation at this point at Citizens Bank is one of the country's largest regional bank. They have 14100 branches but only in twelve states so they are clearly he regional and fourteen under branches in twelve states including. 254. In Massachusetts. And -- employee. Nearly 191000 people now here's the bad news. They have 3400 employees in Providence, Rhode Island guess what happens to those employees there I'm like yeah those jobs go to trial yeah. You know that's they do if if they they're probably more likely they'd probably rather be acquired. By -- -- tell you. Because I think -- would -- ET you would not move those jobs down to Brazil and I think eats you would keep the jobs in Providence. If Toronto Dominion Bank buys them I can promise you you have a lot of layoffs in in product for Canadians added again is taken us out of work yes and I mean really -- they take all the jobs of the hockey players because their genetically superior. Every -- everything -- don't have to hockey with you it's it's. It's -- just back to look at the NHL all -- look at theater itself because they're on strike right now that's another thing it did for another day yeah I union -- unions AV NN the unions -- yeah you're union yeah only union -- for particular -- Right you're either union or you're not. Ranked and lord. Password of the day is the word oil tech's number is 68680.