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No. of Recommendations: 2
Why E*Trade Is a Must Buy

E*Trade (ETFC). Analysts believe it's now undervalued after trading near $2 less than a month ago. Now at $1.84, ETFC may soon receive a buyout offer. The people I speak with guess $3 to $4 a share will be the offer and could come any day. A few years ago analysts said ETFC could fetch between $10-$11 per share on a buyout deal. Now the book value is about $2.70 a share. Cost savings to an AMTD bottom line of a merger make a lot of sense. ETFC CEO Donald Layton will step down at the end of the year. The poison pill is out; this makes a takeover very easy.

September 18, 2009

Goldman Sachs upgrades E*Trade from Neutral to Buy and raised their 6-month price target from $1.70 to $2.30. The firm cited improving trends in the bank and broker segments.

The firm said,

With improving delinquency trends in the home equity line of credit portfolio and solid brokerage trends, E*Trade appears to have turned the corner in its performance and we estimate the shares have 35% upside from current levels.
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