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. (WAMUQ) 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 U.S. 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, which 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, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets; and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. In addition, the Corporate Support/Treasury and Other includes the community lending and investment operations, the Treasury function, the Corporate Support function and the Enterprise Risk Management function. In September 2008, JPMorgan Chase & Co. acquired all deposits, assets and certain liabilities of Washington Mutual banking operations from the Federal Deposit Insurance Corp. (FDIC).  On September 26, 2008, the Company filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

    WAMUQ was founded in 1889 and is headquartered in Seattle, Washington.

    Share Statistics (2-July-10) FY2007 FY2008 % Chg Q2 2007 Q2 2008 % Chg
    Symbol WAMUQ Revenue, $Mn n/a n/a n/a n/a n/a n/a
    Current price $0.18 Gross marg. n/a n/a n/a n/a n/a n/a
    52wk Range: 0.07-0.70 Oper. margin 2.17% n/a n/a n/a -193.7% n/a
    Avg Vol (3m): 11,533,000 Net margin n/a n/a n/a n/a n/a n/a
    Market Cap. 307.58M
    Shares Outstanding 1.71B EPS, $ 1.22 n/a n/a 0.93 -6.65 -815.1%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    Financial Strength (2-July-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.00 4.72 0.81
    Current Ratio (MRQ) 0.00 8.57 0.97
    LT Debt to Equity (MRQ) 117.27 94.77 102.90 132.32
    Total Debt to Equity (MRQ) 118.37 322.70 277.44 197.16
    Interest Coverage (TTM) 0.00 -7.59 40.91

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    No analyst recommendations are available for WAMUQ.

    Source: http://www.reuters.com/finance/stocks/analyst?symbol=WAMUQ.PK

    Investment Highlights

    Last month, the Company postponed a hearing on its disclosure statement to provide more time for discussion with shareholders over making changes to its bankruptcy plan. Company attorney Brian Rosen has said that both sides hope to see if a resolution can be reached to modify the plan and the disclosure statement.

    WAMUQ filed for bankruptcy in September 2008 after the FDIC seized its flagship bank and sold its assets to JPMorgan for $1.9 billion. The sale resulted in the two banking companies and the parties trading lawsuits against one another over roughly $4 billion in disputed deposit accounts.  A settlement agreement between the WAMUQ, the FDIC and JPMorgan will serve as the basis for the Company’s reorganization plan.

    Last month WAMUQ proposed splitting almost $10 billion in cash and tax refunds with JPMorgan and the FDIC in exchange for an agreement not to sue them. Shareholders are looking for information on how the Company put a value on the settlement. Under the proposal, shareholders would get nothing.

    WAMUQ said its disclosure statement hearing was moved to July 7.  A disclosure statement must be approved so the Company can begin putting its reorganization plan to a vote.  A related dispute over information sharing would also be heard on that day.

    Source: Reuters.com

    Technical Analysis

    Source: http://stockcharts.com

    Thursday, WAMUQ closed above its 13-day moving average. This is generally considered to be an indication of a bullish trend.

    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 indicating a weak bearish signal. Although the indicator is above the critical level of zero, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9-day moving average or signal line.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    July02-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    PNC Financial Services PNC 55.67 29,260 11.77 9.58 1.94 1.95
    Citigroup Inc. C 3.79 109,830 11.15 8.61 1.21 1.22
    JPMorgan Chase & Co. JPM 35.83 142,560 11.16 7.54 1.34 1.31
    Wells Fargo & Company WFC 24.88 129,630 12.76 8.67 1.52 1.47
    Median 11.47 8.64 1.43 1.39
    Washington Mutual Inc. WAMUQ 0.18 307.58 n/a n/a n/a n/a

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITYInside 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% n/a

    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (8,868,160)
    % Change in Institutional Shares Held 235.22%

    Source: Yahoo Finance

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