Well, I just bought a small position in AHM at $28.01. It reached my limit order that I put in last week. An "exploratory position" as Paul likes to say.
If it continues lower and there is more insider buying I may add to my position.
The low PE and the high dividend yield combined with the high credit scores they require got me interested.
I admit Im not competent to judge the real risk.
Im hoping the directors recent buy as well as the CEOs buy of 300,000 shares in Nov 05 at $27.75. The downside of the CEOs buy is the huge salaries that he and the other officers pull down.
I asked a friend of mine, a really successful value investor who buys mostly low priced stocks his opinion.
He said......
"Not bad, perhaps, but I'm not interested, personally, in $30 stocks. Average EPS over last 5 years is like $3.25. Declining now, but I might imagine they would remain profitable. But what kind of PE do you want to assign to lenders, even if they are not a subprimer. Sure, maybe it'll be $35-40 in a year, but I'd rather buy something at $1.50, that has a chance of being $2.50.
(I didn't take the time to evaluate whether they were or were not a subprime company.)
Insider selling at $35. Stock was $10-12 a few years ago. I don't like the risk reward. They could take it DOWN a lot more, before it goes back up." |
