Nov.18,2000,<font color=red>COMPLETE CNC NEWS ,REVIEW AND COMMENTARY
This post from normasky @ YHOO says a lot about CNC and Wendt. In particular
the line about…:
" Gary Wendt has set the stage for skyrocketing profits
messages.yahoo.com
11/17/00 9:52 am Msg: 83107 of 83191
Couple of interesting points from CNC
Finance 11/14 10-Q. First, the unit owns about $1.3 billion
of loans for discontinued products.
These loans will either be sold or self-liquidated by the Company and the proceeds
will be used to pay down debt.
Second, the amount of cash generated from the i/o strip for the first nine months of 2000
is only $164 million which is down $179 million from the prior year. The $164 million equates to
about .7% on an annualized basis of the average balance of the mortgage porfolio.
The reduction in cash is due to significantly higher bad debt expense and a worsening of the
delinquency rate of manufactured housing. The Company is obligated to pay bondholders interest and
principal on all delinquent accounts. So it looks like the unit is only retaining about 20% of the interest spread
which is somewhere around 4.0% points (difference between
homeowner rate and the pass through rate).
This is what precipitated the additional $200 million writedown of the strip.
As the i/o strip becomes more "seasoned" and the "dead weight" drops out,
CNC will retained probably about 70% of the spread or about 3.0% points. 3.0% of a $15 billion
seasoned portfolio is still $450 million per year. Going to be interesting
when Gary Wendt starts to write-up the value of the strip.
Wendt is going to say that " I can't carry the i/o at no value when it's
generating a ton of cash". (Value right now is only $600 million)
Politically, he did the right thing writing down the strip.
Gary Wendt has set the stage for skyrocketing profits.
What I like best about Wendt is that he's tightened up
the underwriting standards of the finance unit.
He lists the number one strength of the finance unit as
disciplined credit risk and pricing philsophies.
The third quarter 2000 securitizations are prime examples of his
philosophy. 700 basis points retained interest on HELs and 500 basis points
retained interest on MHLs, up about 200 basis points over the prior year.
Like picking cherries because the competition is way down.
Colin Devine and Peter Eavis are going to eat crow very shortly.
Most of these guys on the street, in my opinion are financially
illiterate.
by: normlasky
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A couple of nice articles:
From S & P 500:" Playing The January effect "
personalwealth.com
And from Business Wire:
quicken.excite.com
Friday, Nov. 17,S&P Affirms Frontier National Life Ins. 'BBBpi' FSR
Key rating factors include extremely strong capitalization,
above-average profitability, and strong liquidity, which are offset
by limited operating scope
Major Rating Factors:
-- Capital adequacy, as measured by Standard & Poor's capital
adequacy model, is more than 300%, which is extremely strong.
Total adjusted capital was $7.5 million at year-end 1999
versus $7.1 million in 1998, an increase of 6.2%. However, the
company is somewhat aggressive with respect to risk assets
(61.1% of capital). The largest class of risk assets is $3.6
million in unaffiliated preferred stocks, which represents
about half of the company's total adjusted capital.
-- The company has demonstrated above-average profitability, as
measured by a five-year average ROA of 5.2% that stems, in
part, from the absence of new business production.
-- The company has extremely strong liquidity, with a liquidity
ratio in excess of 260%.
-- The company's operating scope is limited. Net premiums written
declined 2.1% in 1998 and declined again 24.1% in 1999 to just
$1.1 million.
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And finally…market outlook:
Just beginning… ( Harsh landing that is….;from Barron's )
Message 14839213
Have a good weekend all,
TA
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CNC NEWS, REVIEW, FUNDAMENTAL DATA AND COOL LINKS
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ALL CONSECO ARTICLES since JULY 2000 when WENDT came aboard
Friday, Nov. 17,S&P Affirms Frontier National Life Ins. 'BBBpi' FSR
Key rating factors include extremely strong capitalization,
above-average profitability, and strong liquidity, which are offset
by limited operating scope
quicken.excite.com
BW: Nov. 9,2000: Conseco Finance Announces Multi-Year Contract With Menards
biz.yahoo.com
Tuesday November 7, 1:37 pm :
A.M. Best Upgrades Conseco Inc.'s Principal Life Insurance Subsidiaries
biz.yahoo.com
Nov. 7, 2000 A.M.Best Upgrade
CBSMarketWatch A.M. Best upgrade.
www2.marketwatch.com{D9A03364-250A-43EE-B39C-48E0E74EFE57}
Nov.7,2000: CBS
www2.marketwatch.com
CNC gets debt upgrade
--1:02 pm - By Michael Baron
Conseco (CNC: news, msgs) is jumping $1.50, or 21.6 percent, to $8.44, after
A.M. Best raised the debt rating on the Carmel, Ind., financial services firm's
insurance units to 'A-' from 'B++' and removed them from 'under review' status.
Michael Sheldon, an analyst with Spencer Clarke LLC, said this event represents a significant strategic positive for the company. "This reassures investors that
management is taking the right steps to make the company competitive and
profitable in the marketplace," said Sheldon, who has a "hold" rating on Conseco
with a price range target of $10 to $15. "I believe the stock could move several
dollars higher in the next few months as investors come to terms with this news."
Message 14723848
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WHO IS GARY WENDT
Message 14723560
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CONSECO FUNDAMENTAL DATA AND COOL LINKS
Message 14723456
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NICE site to get IMMEDIATE NEWS FROM DOWJONES
quicken.excite.com
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BROKERS & FUNDS RATING & buying CONSECO
personalwealth.com
Fri Nov 17, S&P Playing the "January Effect"
Message 14723320
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CONSECO INSURANCE RATINGS
Message 14723220
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BUSINESS PROSPECTS IN CONSECO:
BW: Nov. 9,2000: Conseco Finance Announces Multi-Year Contract With Menards
biz.yahoo.com
Message 14723085
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CNC Preferred Stock and Bonds
Message 14722931
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IRWIN JACOBS and CNC SHORT SQUEEZE:
Message 14722401
CNC Longs amusement Park
Message 14445597
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Why Wendt took job at CNC and SALARY discussion
Message 14722571
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MISCELLANEOUS
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ISSUE OF CNC potential for BANKRUPTCY
Message 14721647
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Issue of ARGOSY sale controversy
Message 14816688
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WHY I INVEST IN CONSECO
ragingbull.altavista.com
moneycentral.msn.com
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RUMORS
Nov. 2, 2000: ALLIANZ to buy CNC?
messages.yahoo.com
siliconinvestor.com
Sep 21, 2000 AIG to buy CNC and install Wendt as CEO?
Message 14426456
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EQUIPMENT used to post <vbg> :
Message 14721259
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CNC INVESTMENT DISCLAIMER FOR DUMMIES :
Message 14721315
Note: If you click on my last post it will take you to my
very first post 2 months ago.
TA |
