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U.S. Bancorp (USB) operates as a financial holding company. The company provides a range of financial services, including lending and depository services, cash management, foreign exchange and trust and investment management services. It also engages in credit card services, merchant and automated teller machine processing, mortgage banking, insurance, brokerage and leasing. USB operates a network of over 5,000 bank-branded ATMs and provides around-the-clock telephone customer service.

Its wholly owned subsidiary, NOVA Information Systems, Inc., provides merchant processing services directly to merchants and through a network of banking affiliations. The business provided by U.S. Bancorp through U.S. Bank and other subsidiaries include Wholesale Banking; Payment Services; Private Client, Trust and Asset Management, and Consumer Banking. On December 30, 2005, the company acquired the corporate trust and institutional custody businesses of Wachovia Corporation.

U.S. Bancorp has assets of more than $219 billion and is the 6^th largest financial services holding company in the United States. With over 2.400 banking offices the company provides a full line of banking brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions.

The company has a terrific fundamental profile with stellar return on equity numbers and lots of free cash flow. In addition, the company has an attractive earnings growth. Recent earnings look really good as fourth quarter earnings increased 4.5 percent. Net income increased to $1.19 billion from $1.14 billion the same quarter the previous year.  Net revenues increased 3 percent to $3.42 billion. The company indicated that fees were bolstered by 26 percent increases in merchant processing services and 24 percent in trust and investment management fees.

Technically, the stock is forming an Elliott Wave-4 buy pattern, as depicted in Figure 2, below, projecting a possible increase into the $40 per share range after finding solid support around $35 per share. U.S. Bancorp has a very liquid options market so the trader can get into and out of positions with little slippage. Also, the stock has LEAPS providing the options strategist the capability of putting on positions going as far out as January of 2009.

Figure 1: 12-Month Price and Volume Chart for U.S. Bancorp

Figure 2: Elliott Wave-4 Buy Pattern for U.S. Bancor


Happy Trading.

Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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Listen to Jeff at www.ProfitStrategiesRadio.com

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