P/E of under 6, and only $3.50 -- Unheard of Company Message Board

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Microcap & Penny Stocks : P/E of under 6, and only $3.50 -- Unheard of Company

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To: ForYourEyesOnly who wrote (14)	3/26/1998 9:02:00 AM
From: Labrador	Read Replies (1) of 16

I am not sure what DD means? Obviously considerable risk to this company. I noted before the substantial nonperforming loans that they originated -- I am not sure if the problem rests with their subservicer or if the loan origination process is flawed. I was concerned that Fannie could terminate their contract -- which they did. I am also concerned about the valuation of their I/Os, since detailed methodology is not provided -- but what is provided seems that they have used a conservative methodology. I also take confort that they have used a big six firm (coopers) for their audit -- maybe I should not view a big six over other firms but I do when the subprime market is concerned. I do find it hard to believe that the company was blindsided by the fannie mae move. It seemed to be rather obvious -- so in retrospect, I question why the chairman came out and said that they'd earn 65 cents. May be he thought that Fannie would not terminate the contract. I guess that I also wonder why HCAP let their stock open up yesterday morning (without a preopening announcement) when they knew of a material event the day before. Obviously, some people knew since sellers were flooding the market. I think that this was an incorrect move on the part of the company -- and they may be responsible. Overall, if they can turn this franchise around -- there is definite value here -- a nationwide title one franchise has value -- so much rests on the value of the I/Os -- and since many of the undrlying loans are nonperforming the value could be substantially less than book and require a writedown. There 10-KSB is due I believe by the end of the month -- I would suspect that it will not be filed - but if it is we will know much more. I think that it is clearly a very speculative buy at this point - but I did jump in for shares yesterday. I wish we could have more discussion on this stock -- I think that I will copy this and set up a separate board for HCAP. regards

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