Discussion in 'Stocks' started by NoDoji, May 4, 2010.

  1. NoDoji


    Market professionals, please explain:

    RDN has 83% institutional ownership, meaning "smart money" (I use the term loosely here) is heavily invested in this company.

    I'm looking at their earnings over the past 3 years and, well, there aren't any.

    2007: -3.70/EPS
    2008: -9.51/EPS
    2009: -1.80/EPS

    Projected earnings:

    2010: -2.96/EPS
    2011: -0.98/EPS

    It appears that in July 2008 and March 2009, they were trading around 1.00/share, close to a fair valuation, I guess.

    But as recently as just over a week ago they hit a 52-week high.

    Why? Why were people bidding up this stock over the past 6 months?
  2. Paraducks


    Hey Nod, kinda threw me off with the market professional lead in.
    RDN, Radian Group, tends to track on the coat tails of the financials. They provide credit insurance of all kinds. As long as the Feds prop up the large financials, these guys will tag along. I made some $ on them on the way up, but only as a side bet. Your right They`re actually worth closer to 1 buck than...$12.
    On another note; watch where your family puts they`re tootsies, rattle snakes are out, hungry and in a bad mood. Popped 3 so far. They wanted to share the back porch. My lovely wife has a nose for them.
  3. NoDoji


    They are indeed! We have a few king snakes around the yard, so hopefully they'll keep the rattlers at bay.

    I always wonder about these stocks that seem to have no positive earnings, yet they go up, with the exception of biotech where you're hoping for future results based on something actually baking in the oven.

    Another one hit my radar, PPS. It's gone straight up since February, hitting 52-week highs today, despite not posting an annual profit since 2007, and projecting losses for 2010 and 2011.

    So they post another loss, but it's not as bad as analysts expected and president and CEO David Stockert said "conditions are likely to improve during the year." That's worth two analyst upgrades and a new 52-week high.

    They pay a dividend. In the absence of earnings for over 2 years and none in the works through 2011, what is it they're actually "dividing"?
  4. Paraducks


    PPS I believe is a REIT. Very hard to judge most REITs by profit alone. You`ll need to check their assets. Look at the markets they`re present in ie; east coast, west coast, depressed economies or hot metropolitan locations. Are they invested in strip malls, apartments, condos etc. I`ve found over the years that investment trusts are best judged by reading the quarterly and annual reports. Also be aware of their tax structure. Some have to pay out almost all of their profits in dividends after operating expenses. REITs were really on fire a while back.