Watch for Opportunity
Posted at 9:40 a.m. EST, Jan. 14, 2009
The opportunities keep knocking, they just knock in strange places. The other day
(a second loser out of Green Bay) priced an offering in the hole, and you made a quick buck if you blinked simply by getting in on a deal meant to appease the regulators.
First Midwest Bancorp
(FMBI - Get Report)
-- another ne'er-do-well bank, this one from Illinois -- looks to be another quick gainer.
Getting Back to Even
, I stress that this strategy of buying merchandise in the hole, even if you don't like the merchandise, is a dynamite idea, just dynamite.
It is counterintuitive to buy anything you don't care for. ASBC and FMBI, like
(ZION - Get Report)
, are banks that I am not crazy about. But when they raise equity, they go from being a bad story to being a good story. Check the REITs -- names like
(FRT - Get Report)
(BDN - Get Report)
(BXP - Get Report)
, and many of the hotel REITs -- if you don't believe me. Or the huge gains in
(X - Get Report)
after its deal. Other than Federal Realty, I didn't care for any of these deals
the refinancing. After, though, they are terrific. The
(WFC - Get Report)
Bank of America
(BAC - Get Report)
bank deals and all of the other secondaries all worked too, including ones like
(COF - Get Report)
that seemed like they shouldn't, given Obama's attack on credit cards.
In fact, only
(SNV - Get Report)
was a disaster.
So keep an eye on these. They keep happening. Stocks that that are bad before they sell stock and good after.
A great pattern.
Would I hold ASBC or FMBU after these deals? I like to own the well-managed ones, not the "bad" ones, so I am indifferent after the deals are done. Money is money. I like the quick profits.
At the time of publication, Cramer was long Apple and Bank of America.