Discussion in 'Stocks' started by qll, Apr 4, 2007.

  1. qll


    Any comparison here, in term of liquidation value and chance of staying in business?
  2. All are are dangerously overexposed to the sub prime lending market and are at risk of bankruptcy. Future profitability for these companies will depend on one of two (interdependent) factors: the fed lowers interest rates or the housing market undergoes a speedy recovery. Absent of these forces, the survival of these companies is highly unlikely.

    These stocks are obviously highly correlated in terms of price movement.
  3. qll


    newc is already in chapter11. you think lend and fmt will go under too? they are still traded above $5.
  4. If you ask because you're looking for a short play, none of these companies makes a good candidate. They've already been battered enough and upside potential, however unlikely, dwarfs what's left of the downside for these stocks.

    An alternative you may want to consider is shorting homebuilders such as LEN, KBH, TOL, NDE, and BZH. While these stocks/companies have suffered as well, they have yet to realize the extent to which their bottom lines will be affected. The ailing real estate market is just the beginning. The real trouble rests in the increasingly stringent lending standards, which will eliminate the once insatiable appetite for cookie cutter complexes (100-1000 identical home projects).
  5. Not eliminate, but greatly reduce.
  6. Daal


    Lend is more cash conservative. their retained earnings grew 24% in 06 compared to -4% of New Century. their book value is pretty good compared to price
  7. I don't know that retained earnings from 2006 has any bearing on LEND's outlook. The company is begging for financing right know, which is most likely a last ditch effort to escape bankruptcy. IMO, these stocks are not worth buying OR selling at this point.
  8. subban


    lend does mostly prime loans. Should eventually turn around if Countrywide and Wells don't come in take their business.
  9. dhpar


    how reducing fed funds helps these companies? Or you are just repeating something you've heard on CNBC.....
  10. #10     Apr 4, 2007