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Saturday, 07/24/2004

Hunting Down Profits
By Nich Sheldon
HBAN - Huntington Bancshares Inc

Company Description

Huntington Equipment Finance is a division of The Huntington National Bank, the principal subsidiary of Huntington Bancshares Incorporated (Nasdaq: HBAN - News), a $31 billion regional bank holding company headquartered in Columbus, Ohio.

[Source: Company Press Release]

Reasons to Invest:

Every week I seek out the perfect DRIP plan for you fellow investors in hopes that we can share in some sizable profitability. We have had some hypothetical huge winners, and with the exception of Merck, some minor loses, but I think it's time that we sink our teeth into another stock, of which has been setting new 52-week highs throughout the year. With that in mind, how do you like your DRIP plans? I like mine medium rare (GRIN)! I think this week's find is worthy of being called rare for the simple fact that the stock is firing on all indicators, not to undermine one super strong second quarter.

This weeks DOTW is Huntington Bancshares Inc (NASDAQ:NYSE). The company currently fashions a 2.5 point trading range, inside of a March 03 Regression channel. I note a newly formed bullish crossover on the weekly chart, as well as the simple 10-DMA braking out over the 20-DMA (generally a good indication of bullish things to come - also true with just about any trading style you use).

Because HBAN has been setting new 52-week highs throughout this past week, there is no proverbial glass ceiling to slow down its upward momentum. Furthermore, the stock is using all of its simple moving averages as support for higher climates. Basically I am saying that I see no overhead resistance for the stock until the 30-32 range which was support/resistance for the stock from 1997 through 2000.

The point and figure chart notes HBAN on an Ascending Triple Top Breakout, with a bullish price objective of 34.50. Now if this were to be the case, and the regression channel was to prove as support and resistance for the stock, we wouldn't see the 34 level until September of 2007. This means that we have at least three years to see a gain of 10+ points, which tallies out to about 43 percent gains for the stock, or a 14+ percent return year over year. I don't know about you, but I hope for ten percent per DRIP plan that I am involved with year over year, and if I can squeeze out another four percent I will be more than happy to cash in.

Another positive to this DRIP is the fact that they allow auto- reinvestments, accept foreign accounts, and temper enrollment all for FREE. Yes. You did read that right. The company charges NOTHING for auto-reinvesting your dividends and quarterly payments. They also do not turn down foreign money. One downside is that they ask for a minimum quarterly investment of $200. This can be a lot of money to those actively involved with other trading styles, but I like that the investment is quarterly instead of monthly, as $200 is easier to come up with every three months, as opposed to every month. Plus, $200 will buy you 8 full shares per quarter, keeping in mind that this is the minimum, imagine if you can drop in a few extra hundred a quarter, or even if you could afford to invest monthly - something to think about.

On July 14th, 2004 the company announced that they would be reversing their dividend cut from 2001. Now the company sports a quarterly dividend of $0.20/share, or $0.80/share/year, which tallies out to a 3.25 percent yield. Now tack this 3.25 percent yield onto your hypothetical 14 percent return from just being involved in the DRIP, and we are edging our way towards 20 percent returns year over year. Is this still not enough incentive? How about a projected dividend percentage growth rate of 4.69 percent over the next year?

Financially speaking, Huntington has about $31 billion of assets, in more than 300 banking offices. Additionally their net interest income for the second quarter rose 30%, to $414.6 million. Net income for HBAN also surged higher, as the company reported an increase of 14%, or $214.3 million.

This ends another exciting episode of the Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the limelight.

Until Next Week,
Nich Sheldon

Broker Recommendations

Strong Buy         0
Buy                0
Hold              13
Sell               2
Strong Sell        0

Brokers Covering  15

DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes

Min/Max Investment = $200-$10,000/quarter

Reinvestment Fees - 
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: N/A

Transfer Agent:
ComputerShare Investor Svcs.

Corporate Headquarters:
41 South High Street, Huntington Center
Columbus, OH 43287
Phone: (614) 480-8300
Fax: (614) 480-3761


Copyright 2003

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