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DoEddi (27.69)

Citi 07' 2Q Earnings Review



July 20, 2007 – Comments (1)

Citigroup reported its 2007 2Q earning today. Earning per share rise for 18% over the same period in 06, ROE is 20%. Loss due to secondary mortgage has a surprisingly mild effect on the overall result. The stock's yearly earning (from 06' 3Q to 07' 2Q) is now updated to $4.38 par share. Thus according to today's closing price of $50.73 a share, Citigroup current P/E is just 11.58 !!! Time to collect more, I wish I have the money now.

The next stock, which I got, to report its 07' 2Q earning is HSBC, which would be by the end of this month. I think HSBC is likely to report good results similar to that from Citigroup. Especially for HSBC had already made a huge reserve adjustment for secondary mortgage early this year, which makes loss from secondary mortgage be very unlikely to affect its result in 2Q. We would see this very soon.

Manulife has been going strong recently. This is partly due the weak US Dollars towards Canada Dollars, which makes this stock looks much more attractive. It projected earnings from 06' 3Q to 07' 2Q is 2.70 CAD. According to its current closing price of $38.37, its current P/E seemingly lower to just 14.88, which I think is arguable.

For people doesn't have this stock now, I would advise against buying this stock now, as the weak USD towards CAD might not have the effects people thinks. Since Manulife has lots of US and other overseas businesses, its actually earning might be affected by this exchange rates differences.

For people who had already became a shareholder of Manulife, my suggestion is to hold on to your current position and wait for Manulife to report its 2Q earnings next month. Anyway, if this thread continues shareholders of Manulife might have a profit of over 20% this year, of which I am very luck to be one of them.

1 Comments – Post Your Own

#1) On July 21, 2007 at 1:20 AM, rd80 (95.74) wrote:

I'm working up a blog on Wells Fargo's earnings report from Tuesday and noted the same thing with respect to mortgage losses being pretty mild.

Maybe they both sold their risk off to Bear Stearns. 

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