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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Pink who wrote (3804)	10/8/1998 1:57:00 PM
From: TraderXx	Respond to of 18998

Mr Pink..one more question..and that is do you think COF is going down with the rest. If so, what do you think its target price would be? Thanks again.

To: Mr. Pink who wrote (3804)	10/8/1998 2:39:00 PM
From: Sid Turtlman	Respond to of 18998

Mr. Pink (and others): Here is a financial industry stock worth looking at on the short side: State Street Corp. (STT), the old State Street Bank, which is by far the largest custodian for the mutual fund industry (i.e., they keep track of the stocks that the funds own, provide daily pricing, etc.). It is actually a very well run, honest company, but its fees are based on the amount of assets in the mutual funds, a figure that has been going down quite a bit of late on the equity side (as if Pinkophiles didn't know that,) somewhat counteracted by rising bond prices. About 30% of its revenues are from financial services outside the US, which can't be good. For years it benefited from positive operating leverage because its costs were not rising as fast as assets under custody were, but that looks like it can now head in the other direction. Stock is $48.50, EPS this year is estimated at $2.67 and $3.08 next year, although that figure will probably come down. Book value is only $13.39 per share. In Pink terms there are no flies, and it may not rate worse than T2, but I think the trend will be your friend on this one. Puts are relatively cheap too.