- American Residential Investment Trust (INV) - has the following going for it:
- NYSE listed
- ipo was in '97, 6.5 mill shs @ $15/share, Painewebber was the lead
- in theory, INV shouldn't lose money b/c they borrow @ one rate & lend it out via mortgage loans; then their profit is the spread
- INV has lost $$'s b/c the borrowers re-finance & pay off their loans
- now: 8 mills shs o/s; $71 mill in equity; or book value of $9 share
- yet stock trades @ $2.20/share
- dividend has been suspended, major write down of assets, $75+ mill credit line w/ Chase just opened
- if you strip away all the recent problems, the underlying spread is generating hefty profits of about $.50/share per quarter
- bottom line: if interest rate landscape stabilizes, INV can regain its footing & go back up to at least the $10 level without much effort. Now at $2.10/share |
