Houston American Energy Corp. Set Up for Collapse [View article]
We find HUSA’s first quarter earnings highly disappointing. We continue to be surprised that these results and this “story” support a $350 million market cap that trades at over 100 times current annualized earnings. We continue to believe this is a highly speculative investment, especially given management’s history. We continue to recommend that investors avoid HUSA until they can provide tangible evidence of drilling success in Colombia (possibility in 2011 or 2012). We hope to be back with more (that we have recently picked up).
Glorified Payday Lender City Holdings: A Wolf in Sheep's Clothing [View article]
Greedcanbgood, thanks for your feedback. A couple of comments: 1) APRs are relevant because they have been successfully used by consumer advocates, regulators and legislatures to drive awareness of abusive practices. In addition, CHCO will most likely always have a balance of overdraft, so the APR should approximate the yield on these “loans” 2) Order checking is irrelevant if a bank approves ALL transactions. In this case “high-low” drives significantly higher fees with no benefit to the consumer. 3) CHCO does disclose losses on overdraft. According to their 10-k, their net charge-offs for overdraft in 2009 were less than 3% of service revenues. Payday loss rates are 5 to 10 times this amount. In Table 2, a 92% margin assumption is used for service fees. With only 3% going to losses, that margin assumption seems very reasonable.
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.
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.
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.
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.
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.
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.
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.
Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
Analytics, thanks for the comment but I would appreciate more specific commentary on where or why you disagree with the analysis. Good luck regardless.
Signature Bank: An Obvious Financial Short [View article]
Ictus, I would check Etrade again. It is an easy borrow at the lowest rate (millions of shares are available). Either etrade made a mistake or their stock loan is terrible.
A Violent Correction Could Be Coming for Hampton Roads Bankshares [View article]
Kraven, thanks for you comment but I respectfully disagree with your "misinformation" comment. We can argue semantics, but HMPR "failed to perform or pay" (aka default dictionary.reference.c...). I found it ironic that a few months after the bank's management complained about the compensation restrictions of TARP they "failed to perform or pay." As I mentioned in my article, I did a screen of US banks w/ greater than $75 mm market cap (so over 325 banks). I think my characterizations were correct. For example, HMPR was the most expensive on a price to tangible basis (PRSP was #2 at 3.7x), fourth worst for NPAs to tangible capital plus reserves and fifth worst for NPAs to assets.
National Financial Partners: Finally, a No-Brainer to Buy [View article]
Was asked our calculation of Enterprise Value and pro-forma capital structure. After the refinance, we estimate the company has $58 million cash, $125 million of bank debt and the $125 million convert plus $405 million market cap = EV of just under $600 million. We exclude the benefit for the substantial free cash generation over the next few quarters.
Glorified Payday Lender City Holdings: A Wolf in Sheep's Clothing [View article]
It recently came to our attention that a class action lawsuit has been filed against CHCO for their “unfair” assessment of overdraft fees. The lawsuit highlights some of the aggressive practices that we profiled in this article. We believe this adds additional near-term risk to CHCO’s stock price. www.dailymail.com/Busi...
Houston American Energy Corp. Set Up for Collapse [View article]
Glorified Payday Lender City Holdings: A Wolf in Sheep's Clothing [View article]
The Long Case For Security National Financial [View article]
Flagstar's book value plus DTA = $22. Stock is at $13.
The Long Case For Security National Financial [View article]
The Long Case For Security National Financial [View article]
Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
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.
Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
Harbinger Group's Sum-of-Parts Does Not Add Up [View article]
Signature Bank: An Obvious Financial Short [View article]
A Violent Correction Could Be Coming for Hampton Roads Bankshares [View article]
A Violent Correction Could Be Coming for Hampton Roads Bankshares [View article]
National Financial Partners: Finally, a No-Brainer to Buy [View article]
Glorified Payday Lender City Holdings: A Wolf in Sheep's Clothing [View article]
www.dailymail.com/Busi...