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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (33033)	12/13/2008 6:17:56 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78758

"BK tangible book value is <5B$ and their market cap is almost 30B$." Yes, I spotted that relatively low tangible book value. Quite a difference between market cap (and stated book value) and tangible book. Now if BK - The Bank of New York Mellon Corporation - were actually a bank - or primarily a bank, then I would expect/hope that most of its assets and liabilities were financials such that tangible and stated book value figures would be closer together. (In normal times, buying a bank at its book value has been considered a good bet.) If I were to buy, I might pick $23 as a somewhat arbitrary point for a small BK buy. I like that BK in every year in at least the past ten, has sold for at least twice stated book value (except maybe '07, selling at 1.9x stated book value). So this might give a 2:1 upside. I don't like that stated book value seems to have dropped (in '08). If that continues, that 2:1 upside might not be so profitable a bet. I also don't like (maybe because I don't really understand) the big discrepancy between stated and tangible book value - maybe it's due to the Mellon acquisition (buying over book of course). -------------- All this may be somewhat inconsistent on my part (I hope not hypocritical though), because I have bought and am holding a few shares of STT which has some of the same aspects I question about BK. BK at current price and prospects might even be the better bet. finance.yahoo.com