Wachovia's Too Cheap Now

Wachovia's (WB - commentary - Cramer's Take) all wrong. It's the wrong price. It deserves to be 10 points higher. Only then would I regard it as expensive.

I know that this bank is not considered a "good" bank, having made a series of hated acquisitions. But when you get a 5% yield with a Fed that is easing, you are going to get an explosive move in that stock at some point.

Is that nuts? I don't know, the stock is down 10% for the year. It is a $100 billion bank that makes a lot more sense to buy than ABN Amro (ABN - commentary - Cramer's Take). If Citigroup (C - commentary - Cramer's Take) had any smarts, instead of burning money buying silly things like a Japanese bank that's stagnant in the one market that is actually worse than ours, it would buy Wachovia.

I question why you couldn't just sit and wait for this one. We are now in that moment where if the Fed cuts again, you are going to get a whoosh up for the 5% yielders.

Think of it like this: Wachovia has a better yield than ConEd (ED - commentary - Cramer's Take) -- a utility, even! -- and grows faster and could turn out to be an earnings or takeover home run.

To me, the valuation just seems plain wrong.

Random musings: Now we're in a situation where Warren Buffett should have bought a stake in Bear (BSC - commentary - Cramer's Take)! It is up 10 points from where it was when the rumor of his taking a stake was actually alive and well, for heaven's sake.

At the time of publication, Cramer was long Citigroup.

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