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So we have a situation in which a company can now be bought because of two managers who are very smart are buying it, and are legitimizing it, or re-legitimizing it, right before our eyes.
Takeovers Galore in the Bank Patch Posted at 7:00 a.m. EDT on Friday, Feb. 14 Have you ever seen a more downgraded group than the banks? Yet they won't quit. I count downgraded bank after downgraded bank. Yet it's such a silly call to do so because we are about to see real lending in this country and when that happens the whole focus on net interest margin will go away. The new focus will be on takeovers as book values are scrubbed clean and new colossuses can be built. Consider the case of HomeStreet Bank (HMST), one of the best-performing IPOs from last year and a hungry regional bank with a book value that is 20% below its stock price. When you have banks that are trading north of book value and banks trading south of book value it can often be immediately accretive for the expensive bank to buy the cheaper one. The biggest bank that sells at a premium is Wells Fargo (WFC) and it owns more than 30% of the mortgage market. So that won't happen.