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Non-Tech : Signature Group Holdings

ELLH 15.00

0.0%

Oct 28 3:26 PM EST

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To: Carey Thompson who wrote (5)	3/26/2007 1:31:21 PM
From: SI Bob	of 78

I can't imagine it being anything other than non-recourse, but it hasn't been specifically stated by the company. What I'm most curious about is what impact disposing of this side of the company will have on earnings and dividends. At about 5.9% (after the drop so far today), it's not a particularly compelling dividend but also not bad. The problem is that it might not stay and that the stock can tank in one day more than the annual dividend yield. So it's not as compelling as WPL in the sense of security I get from the dividend allowing me to accept a certain amount of downside. But I still like it because I think the punishment it got with everyone else in sub-prime is dramatically overdone. They got creamed nearly as badly as those who do nothing but sub-prime and I think it's an incorrect move that will correct itself to the tune of as much as 50% upside from here with as much as 30% (outside chance) possible short-term. "Here" being $8.11 for future reference. That said, the only encouraging thing I'm seeing in the chart is that it recently did a double bottom and the rebound after the second was bigger than off the first (both very large about 80 and 90%), and we're at another double bottom now with the peak between this one and the last time at this price higher than the peak off the previous double and about 25% higher than the current bottom it seems to be testing. Closing below $8 would be a very bad thing as it would make this a failed double-bottom test. I more than doubled my trading position today from $8.06 to $8.09.

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