E*TRADE Financial Corporation (NASDAQ:ETFC)

Back in this for the long term
3.26 P/E

Value. Volume = profit.

UNDERVALUED... Just another awesome VALUE.

I have to say this pick may be more of a coin toss than a rational decision. Put simply as tightening credit lines and buy outs force more pressure on the already pressured companie such as this I am unsure if they will be able to function and raise capital to rebrand and expand. And with Fidelity and others transforming from mutual fund based broker platforms to independent discount brokers with the full toolkits of research and advertising they already have in place it will be a tough playground for Etrade. I think they have responded well to some bad mistakes in the past and do think they have significant upside especially midterm. But I am very leary about their long term viability or if they will get squeezed between former boutique brokers with discounted rates and budget brokers in the years to come.

Through very good disclosure, ETrade has shown us that they are serious about working off problems. I can see this one doubling each year for the next two. $6 end of 2009 and $12 end of 2010.

Etrade has a great brand. The management of Etrade took a very wrong turn several years ago and lost site of their core strategy and started investing in home mortgages, without a default plan. Wall Street has scorned Etrade for doing this and drove its stock price down to near bankrupt levels. Calling the kettle black? Wall Street may scorn Etrade for their home mortgage debacle, but Etrade still has a great brand, that actually makes money! Goldman, Merrill, Morgan, Bear, and Lehman really don't have alot of room to talk. With Etrades new management and the "getting back to basics" philosophy, Etrade will emerge as a market leader in the discount brokerage sector. The brand is more recognizable to Main Street than the Good Ole Boys Brokerage houses and resonates with the average investor. Soon Etrade will be in talks, again, with possible merger partners, only this time Etrade will be talking on grounds of stregth and not bailout.

In reply to ajsiegel's post below about needing liquidity, doesnt the sale of ETrade Canada provide them with the much needed liquidity. I feel that they are back on track (almost) and would be a good stock to hold on to.

Price way down over bankruptcy fears but they're well on the way to recovering from that. Once they're back in the black expect strong recovery.

Under the turnaround plan, E Trade is eliminating Home Equity Loans,
reducing risk and improving the brokerage business by targeted
advertising, a great platform, and the ability to trade
internationally in five different markets.
Back office support is very strong and accomodating,
and new accounts, assets, and daily trades (Darts) are
increasing every month.
Some of their larger competitors are having problems with
mortgage loans, sub prime securities, and auction rate
securities.
E trade has the capability of moving up 300% in the next year.
Those that buy and hold the stock will reap in major gains.

Already covered their HELOC account; focus on core competency. Holding out till it hits $10 mid-2009.

E*Trade will probably collapse within a reasonable time. Their customer service, while it used to be good, seems to be lacking. Plus there are so many places where you can trade cheaper, for both lower and higher volume traders.

One of the reasons I believe E*Trade will fail? True story: A CSR at E*Trade told me that I couldn't be approved to write covered calls because "[I] wasn't at a stage in [my] life" when I should be writing options. From his demeanor, I don't think he even thought I should be in the market and was belittling in his tone of my supposedly small investments. Suffice to say I was very upset with this. Just as a FYI, I'm 21 years old.

Treating customers like little children... Belittling customers... Hmmm... I don't think this is likely to increase shareholder value.

Definitely an underperform in my book.

best trading platform out there bar none

pure speculation for me based on what I have seen/heard.

Management has stayed on track for their turnaround plan. Ditched non-core business. With Etrade Canada at $400-500M value, I wonder what that puts Etrade at. Too lazy to crunch the numbers, but I bought shares in real life anyways.

Global trading ability with Mobile Pro. Innovation is what makes a company great. Hope to see you at 500% in 5 years.

The HELOC portfolio is going to experience increasing defaults and this company, despite solid core operations, will underperform the market

Another of the - "everybody hates it" so it must be a good value at these prices, can only go up. Few internal things to get cleaned up and these internet traders should boom when market turns corner next couple years

BUYOUT STOCK

E*trade has a solid brokerage business and a competitive advantage with its global trading platform. It dealt with its mortgage problems early on by selling off most of its CDOs. It got a crappy price at 27 cents on the dollar but better than what Merrill Lynch recently got (22 cents on the dollar) for a similar sale. As part of the sale, it also diluted its share base so it will have to grow significantly if it ever wants to see its stock price reach past highs. Even so, getting back to double digits in the next few years is very attainable.

Looks to be htting their low point. Only up to 4 to 5 from here.

We are so oversold. When uyg hit 1/5th of its all time high that indicates the bottom. 20% of book value or 20% of all time high is a turning point in most stocks. It's either you get a huge bounce or you go bankrupt.(ex. SPF)
so consider a call option the odds are in your favor. Don't fight the tape. "Risk is what you make of it"."-Ken Griffin