Filed under: Stocks to Buy

The banking and financial sectors have certainly taken their lumps amid the housing sector’s correction, but that doesn’t mean there aren’t bank stock opportunities out there, and one bank worth a review is Hudson City Bancorp.

Hudson City Bancorp (Nasdaq: HCBK) is a community bank with about 110 branches in the Metropolitan New York area.

Analysts like HCBK’s loan growth, ramping fee income, and strong cost control history. Best of all, analysts say Hudson should not be adversely affected by the secondary mortgage market and its incorrect pricing of loans because Hudson holds most of the loans it originates.

Further, margin spreads should increase in 2008, and charge-offs should be minimal. The Reuters FY 2007/FY 2008 EPS consensus estimates for HCBK are $0.59 to $0.82.

The risks? An inversion of the yield curve would hurt HCBK’s results; competition is modest.

The First Call mean rating for HCBK is: Buy [13 firms]. Mean 2008 target: $15.50 [high: $18, low: $12].

Stock Analysis: Hudson City Bancorp is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from HCBK’s shares. Sell/Stop Loss if you were to purchase shares in this company: $8.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

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This entry was posted on Thursday, January 10th, 2008 at 11:56 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.