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Tuesday, September 30, 2008

Sovereign cheap but risky: analyst

   Sovereign Bancorp shares are worth around $5 a share, triple yesterday's closing price, even with recent mortgage-related losses, writes analyst Matthew Schultheis of Boenning & Scattergood in a note to investors.

   But, Schultheis warns, "investment in SOV shares at these levels presents a great risk that the company may go through a government assisted sale at depressed prices." That's what happened to Washington Mutual Corp. last weekend: Federal Deposit Insurance Corp. protected depositors, other banks and the public, but nothing was left over for shareholders (and not much for bondholders.)
Posted by Joseph N. DiStefano @ 10:55 AM  Permalink | Post a comment
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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