Etrade Bankruptcy Update - Buy Etrade Stock

On Monday, I wondered if an Etrade bankruptcy was possible. On Tuesday, I bought some shares. Why? The analyst report that caused ETFC to lose more than half its value on Monday cited a 15% chance of Etrade filing for bankruptcy. Doesn't that strike you as an odd figure to publish? If the weather report called for a 15% chance of rain, would you fetch an umbrella? Today, the Etrade CEO responded on CNBC, calling the bankruptcy talk irresponsible. I'm debating whether I should hold Etrade stock (ETFC) as an investment or sell in a few days as a trade.

Why am I blogging about this on a blog devoted to search engine marketing? Well, my original post about the Etrade bankruptcy issue mentioned a PPC advertising strategy. Today, I'm writing because a client, Analytical Investing, has some information that might be helpful for Etrade stock investors. This is an unusual situation causing quite a bit of angst in the investment community. If you read this blog for search marketing insights, you can stop reading this post now. I'll get back to SEO/M ideas in my next post. If you're interested in the stock market, however, keep reading. I have permission from my client to post this data, from a Company Query for Etrade:



Two items jump out at me in this analysis. First, the intrinsic value of Etrade stock is calculated as $14.03, more than double where the stock closed today. Second, the safety rating of 18 (on a scale of 100) is very low. On the one hand, then, the stock seems very cheap at these levels. On the other hand, it seems like a risky buy. With the uncertainty in the market and with this stock, in particular, that seems like a pretty good assessment. Did I mention that a subscription to the Analytical Investing service is only $25 for a 3 month trial? ;-)

Anyway, for those wondering about the value of Etrade stock, I hope the above screenshot was helpful. It's always nice to have some objective analysis when there's so much emotion and hype involved. Here's an explanation of the various stock ratings shown in the above screenshot:

For each company, we provide an overall rating, as well as ratings in each of four categories: value, growth, timing, and safety. The overall rating is derived from the other four, and is intended to be a indicator of share price appreciation potential. The overall rating is what would normally be used to make buy & sell decisions, with the other ratings providing more detail about the strengths & weaknesses of each company. The value rating is an assessment of a company's current financial fundamentals, the growth rating is an assessment of a company's growth potential, the safety rating is an indicator of how well a company is protected against a sudden drop in share price, and the timing rating indicates whether or not it is a favorable time to purchase the stock.

Well, I rather enjoyed talking about a client. I might have to do this sort of thing more often, particularly since most of my clients don't have blogs. If you're an investor, do check out Analytical Investing. And, if you've been following this Etrade saga, let me know if you think Etrade stock is a long term buy or a short term sell.

Apogee Tags: etrade bankruptcy, etfc, etrade stock, stock ratings, analytical investing