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  • Access National Is Still A Buy [View article]
    I appreciate your thoughts and quick response. If commissions are 95bp then non-commission salary expense at the mortgage bank is still about the same size as the salary expense at the bank. Since commissions are usually the highest expense for a mortgage operation, this does strike me as a bit strange. I don't believe the 10q is out, but I believe non-comp / ex-provision expense is running ~$1.6-$1.7 million a quarter at the commercial bank segment. For a growing commercial bank w/ >$800 million of segment assets and a wealth mgt division, this sure seems absurdly low. Again, this is just another red flag that something might be up with the allocation of expenses between mortgage and banking (and thus the pain of lower mortgage results could be more severe than expected).
    Aug 7, 2013. 12:01 PM | Likes Like |Link to Comment
  • Access National Is Still A Buy [View article]
    Thanks for the article, but you did not address the elephant in the room. Gain on sale of mortgages was still $7.1 million in 2Q after Denver with total pretax of $5.5 million, so >than 100%. We are just coming out of a mortgage banking volume and gain on sale margin bubble. I have trouble understanding how stock works if mortgage drives earnings lower. Also, I also have trouble reconciling the company's segment disclosures. They appear to allocate very little expense and salary to the commercial bank relative to the mortgage banking segment (potentially overstating the high multiple biz relative to the low to mid single digit multiple biz). It appears somewhat questionable. Would love your thoughts. Thanks
    Aug 7, 2013. 08:58 AM | Likes Like |Link to Comment
  • Impac Mortgage, A Hidden Value? [View article]
    On 5/9/13 conference call they said they had a $800 million pipeline, April was their biggest origination month in years, and guided to greater than $4 billion of originations in 2013. That guidance implied $1.1 billion per quarter. I just read the transcript of the webcast, and looks like 2Q volumes came in below $800 million and they are cutting expenses and laying off people because volumes were so low the past month. Again, not sure where there is value here. Looks like a big value trap. Good luck David
    Jul 23, 2013. 03:46 PM | Likes Like |Link to Comment
  • Impac Mortgage, A Hidden Value? [View article]
    And to throw my two cents in, I see little value in the common shares. They don't have much of the business with my estimate of zero residual value in their securitization (the Long-term Mortgage Portfolio segment), the Real Estate services segment is a melting ice cube (nearly all driven from the shrinking LT mortgage portfolio, which one could argue is someone questionable), and the origination gain on sale business could not make much money despite a historic bubble in gain on sale margins. that bubble has now popped. This reminds me of SNFCA, which I described as a value trap at $8 here on seeking alpha a few months ago (it is now down 25-30%)
    Jul 23, 2013. 02:45 PM | 1 Like Like |Link to Comment
  • Impac Mortgage, A Hidden Value? [View article]
    Per the last 10k, you are correct that company has negative equity: "Book value per common share was $(2.59) as of December 31, 2012, as compared to $(2.65) as of December 31, 2011 (inclusive of the remaining $51.8 million of liquidation preference on our preferred stock)." The 10k also discusses the class action lawsuit from the preferred stock holders. I'm not a lawyer either, but common sense suggests management screwed over preferred holders and could be held culpable.
    Jul 23, 2013. 02:34 PM | Likes Like |Link to Comment
  • Buy Red Hot Spectrum Brands At A Discount Through Harbinger [View article]
    Management's sum-of-parts excludes / backs out SPB's debt. While I find management's sum-of-parts presentation suspect and hard to reconcile, the SPB piece is the most straight forward part. The $7.34 per share valuation is based on a $54.52 per share price in the most recent presentation. At same point in time, HRG had $1.28 billion or $6.21 per share of non-SPG debt and non-VIE debt. The stock is not as cheap as you present above. On another note, as long as the share price remains above the convert price, I find it hard to understand why you wouldn't use the diluted share count (and adjust the valuation for the face value of the converts). Again, good luck.
    Jul 17, 2013. 04:16 PM | Likes Like |Link to Comment
  • Buy Red Hot Spectrum Brands At A Discount Through Harbinger [View article]
    in response to you comment "I thought your sum of the parts argument unfairly punished them for carrying their share of SPB's debt on their balance sheet without giving them credit for the premium to book value that those same assets get at SPB's actual market price," I did adjust the sum-of-the-parts for SPB's debt and the mkt value fo the shares. I think you are somewhat confused.
    Jul 16, 2013. 03:56 PM | Likes Like |Link to Comment
  • Buy Red Hot Spectrum Brands At A Discount Through Harbinger [View article]
    #1 You note that the secondary offering in Dec was "perplexing" and "puzzling." However, my article that you linked to above (from nov '12) predicted the hedge fund's ownership was a big risk that was being ignored. This risk is likely more ellevated today than late November given the SEC settlement that requires Falcone to “take all actions reasonably necessary” to satisfy redemption requests from investors. HRG appears to be the only liquid investment at the hedge fund, so shares are likely to trade w/ a massive overhang until Falcone cleans up his redemptions (ie sells HRG shares). #2 I think your sum of the parts is off. Also, I suggest you look at enterprise value, not market cap. Good luck
    Jun 20, 2013. 03:47 PM | 1 Like Like |Link to Comment
  • The Long Case For Security National Financial [View article]
    Everyone is expanding their distribution networks. Mortgage origination has little barriers to entry and is a commodity business that experienced highly attractive returns for a brief period of time, and as a result, experienced a dramatic rise in capacity.
    Flagstar's book value plus DTA = $22. Stock is at $13.
    Apr 24, 2013. 02:37 PM | Likes Like |Link to Comment
  • The Long Case For Security National Financial [View article]
    Management's selling appears pretty rational to me. For years the company struggled to make much money, and the stock lingered below $3 per share for most of the past 25 years. The Fed's aggressive purchases of agency MBS produced record, and temporary, spreads that enabled mortgage originators to overearn. If, but more likely when, spreads and volumes normalize, the company's earnings power will be dramatically lower. just my opinion, but this has the makings of a value trap. again, good luck.
    Apr 24, 2013. 01:24 PM | Likes Like |Link to Comment
  • The Long Case For Security National Financial [View article]
    Thanks for the article, although I think you may want to dig into the sustainability of mortgage gain on sale. The improvement in their results were driven all by this line item. Plenty of other gain on sale players have turned out to be value traps. FBC is one example. you can pick that one up for 3x EPS. good luck.
    Apr 24, 2013. 12:59 PM | Likes Like |Link to Comment
  • Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
    I did take out the face value of the convert from the liabilities: "convertible preferred stock (so roughly 202 million shares out with a subsequent reduction in debt)"
    I didn't look at your full analysis because I didn't get past the first part. .7x book-aoci / 202 mm shares = $2.65 per share, not $5.
    also, HGIF is deploying funds from the life insurance co I believe (and no outside money). So believe you are double counting the value (your $1). It is like AEL giving its investment department a name and trying to prescribe value do it. worth a shot if investors fall for it.
    Jan 24, 2013. 06:50 PM | Likes Like |Link to Comment
  • Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
    Not quite. I do argue that it is overvalued (so view of value of assets v. enterprise value). It is best to compare the value of their assets to enterprise value, not market cap. this accounts for the debt they used to acquire their assets (and must be paid off). I do not believe this is controversial point.
    Dec 5, 2012. 04:37 PM | Likes Like |Link to Comment
  • Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
    Illuminati, I estimate an enterprise value of HRB of just under $2.2 billion ignoring SPB's consolidated debt and adjusting for expo. Fully diluted market cap alone is north of $1.7B. good luck.
    Dec 5, 2012. 09:51 AM | Likes Like |Link to Comment
  • Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
    Oilmannn, "those who feel" that spb is under valued are better off owning SPB than HRG, in my view. I don't have a strong view on SPB other than it is a low multiple, low growth roll-up that will be riskier with $3.2 billion of debt. I may be "crazy" or "on crack," but I have a hard time reconciling your comments of getting Falcone "out of the way" and the thin trading volume. If Falcone is out of HRG then Harbinger Capital is most likely not viable, which means they would likely distribute or sell their 129 million or so shares, which would likely crush the stock. Best of luck.
    Nov 20, 2012. 04:42 PM | Likes Like |Link to Comment
COMMENTS STATS
57 Comments
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