Prudential Trust seems neither prudent nor trustworthy
.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:
I have two questions. My first question concerns Prudential Bank & Trust. You wrote something about them more than a year ago and said that it was a poorly run bank. I’m a client of this Prudential Bank & Trust because of my company’s 401(k) plan. I’ve got a problem with my account, which I’m having trouble solving. I want the account sent to me (it’s all cash because it was in a stupid mutual fund) so I can personally take it to a broker. I want to hold the check in my hands. Why is this so difficult? Well, I can’t get the Prudential Bank & Trust people to send me my money. The people I speak to are located in call centers (probably in India or Poland) and don’t understand what I want. So I tried to find the name of the president of the bank and write him a letter, but nobody at their toll-free number knows his name or could find it for me. I called three times and one person switched me through four different associates before I hung up in frustration. Can you give me the president’s name so I can write him? Now, my second question concerns Sara Lee, which sells at $16 a share. My broker wants me to buy 300 shares, and it just doesn’t seem like a good investment (gut feeling, if you will) to me.
D.P., Moline, Ill.
Dear D.P.:
Prudential Bank & Trust may be among the most poorly managed bank and trust companies on our side of the galaxy. The president of this slapstick flophouse is a woman who uses the name Christine Marcks. Marcks has tramped through a number of financial firms before landing at Prudential.
One of the ladies with whom I work spent 40 minutes on the phone to find Marcks’ name. You’re right as ice cream on a sundae: Few people at Prudential know who she is. So I rang Marcks to discuss your problem, and none of the people with whom I spoke would connect me. I got tired talking to those scatterbrained, deadhead kids in India and Poland who took my calls in English so I gave up.
Prudential Bank & Trust is part of the Prudential brokerage firm that bilked billions of dollars from investors in the late 1980s and early 1990s, selling private-placement limited partnerships. You should know that. You have a very substantial 401(k) and those young, featherbrained dimwits who took your calls in India and Poland ought to jump through hoops to please you. However, most haven’t finished high school and probably think a blue chip is $10 in a poker game.
Prudential is not a customer-oriented trust company. They’re volume-driven; their assistance is minimal and at best bare bones. Sadly, Marcks, who is kept insulated from the common weal, doesn’t give a fig or ficus about you or Prudential’s other clients. The only advice I can give you is to assign this account to your new broker and have them initiate the transfer instructions. I abhor banks or brokerages that use foreign call centers to help people with their investments.
Now let’s take a look at Sara Lee Corp. (SLE-$16.14), a $13 billion revenue company with a potful of marginal products with which all the king’s men and all the king’s horses pulling together in unison would find it extremely difficult to generate a decent profit.
Sara Lee should win an Oscar for being one of the worst-managed companies on the New York Stock Exchange. Top management has sold off and spun off numerous businesses, creating an $8 billion downturn in revenues and a serious collapse in earnings. It was a masterful stroke of stupidity. However, SLE used more than $500 million of the proceeds to repurchase its stock and retired $800 million of debt.
There’s nothing compelling about SLE, and I can’t find a single reason to own the stock. Its price-earnings ratio of 24 is out of line, its cash flow will be squeezed unmercifully when SLE’s tax bracket zips to 34 percent next year from 18 percent and management has to cough up $900 billion, a result of its Courtaulds sale (a European apparel-maker) to pay for an unfunded pension plan. This company has lost credibility with Wall Street. The only reason I’d consider owning the stock is a probable takeover by Waste Management, Stericyle or Carriage Service Inc.
Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@comcast.net.
© Copley News Service
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