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US Bancorp share looks cheap

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(Update) According to Dow Jones News, USB sold 139 million shares at $18 per share. See the news at WSJ.

(Original) When I say cheap, I meant in relative terms.

US Bank logo

My benchmark: Buffett endorsed 2 banks in Berkshire annual shareholder meeting: US Bank (NYSE: USB) and Wells Fargo (NYSE: WFC). Many people did not know current Wells Fargo is not the good old Wells Fargo in the west coast, a little more than 10 years ago Norwest and Wells Fargo merged, and adopted the Wells name. Ok, back to the topic. Both USB and WFC stocks had a fun ride in the last 12 months. But more interestingly, as of today, WFC is down 5% YoY, while USB is down 42%. In the past 12 months a lot things have happened to Wells, the biggest one being the Wachovia acqusition. Both took TARP money. Both issued common stocks: twice for Wells (last Fall and last week), once fot USB (today). But the purpose of issing stocks is slightly different: Wells needed the money for captial, USB needs the money to pay back TARP.

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This silly earning thing

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First Quarter earning reports for the stocks I own (as of this writing, it could change without notice). This is mostly for my own benefit, I want to collect them in one place rather than go to different IR web sites. Listening to conference call is a mixed experience, sometimes it’s fun, sometimes it’s boring. The most interesting part is the Q&A session, where the analysts and management goes back and forth: and I get the most out of things there (most of time).

US Bancorp USB beat slightly
Conference call (audio and slides)

McDonald MCD (barely according to CNBC)
Conferece call (for some reason it’s not working for me).

CNBC report (link).

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US Bancorp

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Time to do some homework, amid all these AIG bonus (Yahoo Tech-ticker; NY Times op ed), and toxic asset plan (Krugman vs. Geithner craziness). I decided to calm down and took a look at US Bank (bancorp) (NYSE: USB; company IR page).

Articles I read from seekingalpha

Amit Kumar: Bank stocks: invest or trade?

Martin Hutchinson (money morning): Wells Fargo and US Bancorp: hitch a ride with those two

Patrick Garot: Repaying TARP: life for USB and NTRS?

I learned about US Bank a few years ago after the FirstStar merger. My coworker told me that this is the only bank named after “US/United States” after Sept 11 (she implied no more bank will be approved using similar name). Later on I visited US bank branch with my roommate because he was US bank customer. I applied US bank visa card %0 balance transfer last year. They approved my card quickly and gave me a generous credit line 🙂

I will add my investment thesis later on.