Victhom

Jim Cramer's Stop Trading! 1/10/08: Shotgun Marriages for Financials

Jim you always....put down IMB but i found something for you....

www.indymacbank.com/

Indymac has an inner GEM call Financial Freedom??

Do you copy?? Nope?? Let me explain...you know with aging population....we have "REVERSE MORTAGE" with growth over 20%...you follow???

Here for you...

Unlocking of Value

Another intriguing part to Indymac that’s not well appreciated is a business it owns, a reverse-mortgage originator called Financial Freedom, that sits on its books for $80 million. Financial Freedom is the largest player in the reverse mortgage space. This is an area of tremendous opportunity and market focus. As the population ages, the reverse-mortgage business has been booming and is widely expected to grow at 20% or more annually for years. There’s lately been a lot of interest both from private equity and strategic buyers. For example, earlier in the year Seattle Mortgage, the third-largest player, was bought by Bank of America.

Indymac had bought Financial Freedom from Lehman Brothers for $112 million in 2004. The acquisition has been a home run: last year First Freedom earned $54 million. Should Indymac decide to sell this business, it’s not hard to imagine a price of, say, 15 times trailing earnings, or $800 million. To put that into context, Indymac’s total market capitalization is $420 million. For myself, I’d be delighted to see the company sell a minority stake to show the value of this business.