Stock Alert for Washington Mutual Inc. (WAMUQ)
  • Stock Alert for Washington Mutual Inc. (WAMUQ)
  • Stock Alert for Washington Mutual Inc. (WAMUQ)
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    Stock Alert for Washington Mutual Inc. ($WAMUQ)

    Washington Mutual Inc. (OTCPK: $WAMUQ)

    Washington Mutual Inc is in bankruptcy. Investors should be cautious in buying common stock of companies in bankruptcy. It is extremely risky and is likely to lead to financial loss.

    Washington Mutual Inc. (WAMUQ) is a consumer and small business banking company with operations in United States markets. The Company is a savings and loan holding company. It owns two banking subsidiaries, Washington Mutual Bank (WMB) and Washington Mutual Bank fsb (WMBfsb), as well as numerous non-bank subsidiaries. The Company operates in four segments: the Retail Banking Group operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group operates a nationwide credit card lending business; the Commercial Group conducts a multi-family and commercial real estate lending business in selected markets; and the Home Loans Group engages in nationwide single-family residential real estate lending, servicing and capital markets activities.  In September 2008, the Company filed for Chapter 11 bankruptcy.

    Washington Mutual Inc. was founded in 1889 and is headquartered in Seattle, Washington.

    Share Statistics (29-Apr-10) FY

    2007

    FY

    2008

    %

    Chg

    Q4 2008 Q4 2009 %

    Chg

    Symbol WAMUQ Revenue, $Mn 17.23B n/a n/a n/a n/a n/a
    Current price $0.169 Gross marg. n/a n/a n/a n/a n/a n/a
    52wk Range: $0.70-0.15 Oper. margin 26.0% n/a n/a n/a n/a n/a
    Avg Vol (3m): 26,379,400 Net margin -0.4% n/a n/a n/a n/a n/a
    Market Cap. 287.35M
    Dil. Shares Outst. 1.7B EPS, $ 1.22 n/a n/a n/a n/a n/a

    Source: Reuters.com, SEC Filings.

    Financial Summary

    WAMUQ is now owned and operated by JPMorgan Chase.

    Financial Strength (30-Apr-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 16.33 2.75 1.45 0.75
    Current Ratio (MRQ) 17.04 3.30 1.82 0.90
    Long-Term Debt to Equity (MRQ) 0.00 21.17 87.95 143.45
    Total Debt to Equity (MRQ) 2.21 39.51 116.68 205.30

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    No chart available.

    Source: www.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Jun-10 1 21.21 21.21 21.21
    Quarter Ending Sep-10 1 26.01 26.01 26.01
    Year Ending Dec-10 1 99.07 99.07 99.07 62.50
    EARNINGS (per share)
    Quarter Ending Jun-10 1 0.08 0.08 0.08
    Quarter Ending Sep-10 1 0.10 0.10 0.10
    Year Ending Dec-10 1 0.38 0.38 0.38

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=ABAT.W

    Investment Highlights

    A bankruptcy judge on Wednesday cleared the way for WAMUQ shareholders to take legal action to force the Company to hold a long overdue annual meeting.

    Ruling on a motion filed in Delaware by WAMUQ’s official committee of equity security holders, Judge Mary Walrath said the automatic halt to litigation that applies to companies in bankruptcy cannot bar shareholders from exercising their corporate governance rights.

    Rejecting the Company’s arguments, Walrath said it is a “well-settled law” that shareholders can hold meetings to elect new directors despite a company being in bankruptcy.

    The shareholders want a judge in Washington State to order WAMUQ to hold an annual meeting so that they can elect new board members. The Company hasn’t held a shareholders meeting since April 2008, five months before it filed for bankruptcy protection after the largest bank failure in U.S. history.

    The shareholders argue that the failure to hold a meeting violates both Washington law and the Company’s bylaws. They complain that the same officials responsible for WAMUQ’s failure are still controlling the Company and making decisions regarding its bankruptcy case.

    The equity committee alleges that the current WAMUQ board is resisting the election of new directors who would protect shareholder interests in the Company’s reorganization plan and the related settlement of a $4 billion dispute with JPMorgan Chase & Co. and the Federal Deposit Insurance Corp.

    WAMUQ attorney Brian Rosen argued that the shareholders, who stand to get nothing under WAMUQ’s Chapter 11 reorganization, were abusing the bankruptcy process and were trying to sabotage the reorganization plan filed last month, roughly a year and a half after WAMUQ sought bankruptcy protection.

    Walrath said the fact that shareholders are fighting for a better deal or more bargaining power doesn’t amount to abuse of the bankruptcy process.

    Shareholder attorney Stephen D. Susman said the shareholders would go to court in Washington on Thursday asking a judge there to order the convening of an annual meeting.

    Susman said the proposed settlement with JPMorgan and the FDIC remains of great concern to equity holders, who plan to seek the appointment of an independent examiner in the bankruptcy case.

    The FDIC seized WAMUQ’s flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion. The sale resulted in the two banking companies and the government agency trading lawsuits over roughly $4 billion in disputed deposit accounts.

    In a proposed settlement of the competing lawsuits, JPMorgan has agreed to turn over the $4 billion in disputed deposit accounts to Washington Mutual in return for 70% of the tax refunds expected from WAMUQ’s prior operating losses, which are valued at about $3 billion.

    WAMUQ would get about 40% of the tax refunds resulting from a second round of operating losses, which are valued at about $2.6 billion. The remaining 60% would go to the FDIC.

    Source: www.yahoo.com

    Technical Analysis

    Source: http://stockcharts.com

    WAMUQ is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

    WAMUQ has been relatively stable recently. This is evidenced by the width of its Bollinger Bands, which are tighter than normal. Additionally, WAMUQ is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

    WAMUQ’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Apr29-2010 symbol Share, $ $ Mn 2009 2010 2009 2010
    United Community Financial Co. UCFC 1.87 57.78M n/a n/a 0.61 n/a
    New  York Community Bancorp NYB 16.51 7.16B 14.42 n/a 6.74 n/a
    GS Financial Corp. GSLA 13.16 16.55M 18.89 n/a 1.75 n/a
    Financial Median 2.41B 16.65 n/a 3.03 n/a
    Washington Mutual Inc. WAMUQ 0.169 287.35M n/a n/a 0.02 n/a

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases n/a 0
    Sales n/a 0
    Net Shares Purchased (Sold) n/a 0
    Total Insider Shares Held 231.3M n/a
    % Net Shares Purchased (Sold) 0.0% n/a

    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (375,456,000)
    % Change in Institutional Shares Held 101.4%

    Source: Yahoo Finance

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