Aames Financial (AAM) - Undervalued or what??? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Aames Financial (AAM) - Undervalued or what???

AAM 10.64

0.0%

Nov 7 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Bankceo who wrote (323)	12/12/1997 2:34:00 PM
From: Bill De	Read Replies (1) of 510

I am trying to be optimistic but I'm having a hard time with three issues. One is the shorts. I still can not understand why they did not cover at 10/27/97 or 10/28/97 when the stock was trading at $9-$10 a share. I can't believe they are willing to give up $3-$4 a share. They only thing I can assume is that they believe they stock will not close higher than $13 a share by year-end. And in addition, they are probably sitting on huge gains when they do cover (most of these shorts started in July and August when the price was in the high teens and twenties) so they are attempting to defer their tax gains until 1998. If that is the case, than then I agree with you that they should all cover in January. Unless of course, they feel that $10 a share is not the bottom. I again looked at AAM's chart and see no support for $16 by 12/31/97. The stock rallied on 11/03 and 11/04 to high of 15.75 after earnings were announced in October. The rest of the month has been a disaster although it tested $14.6875 on 11/07. Even after the shareholders meeting on 11/19 it again started a downward trend. It tested $14.125 on 12/04 and as normal collapsed. The last time I looked at the price today it was at $12.6875. There is not support to push it up to $14. There is just too much resistance at this point. So I do not see AAM going much higher by year-end. Maybe that's why the shorts have not covered. There are only about 10 or less trading days left in 1997. Hopefully they are gambling that the price will stay put for the rest of the year and then cover in 1998. That's optimistic. If they do not cover early in January than we do have a serious problem especially if the shorts increased this month. Keep in mind the day that Fitch affirmed their unsecured debt on 12/08 the stock price went down. That bothers me because it was the most positive news regarding AAM by an independent source since June. And the stock could not even hold. So even good news can not help AAM. The resistance will continue to keep the price around $13 for the year. I do not see it moving up $3 a share by year-end. Secondly, I agree with you that the institutions are rapidly selling off. Although I did see a block of 70,000 shares purchased recently. But I still don't see them jumping in big time in January especially with the current market. Once the fears of the South East Asia crisis subside and the poor earnings are cast in concrete there will be a lot of bargains out there. Many of the big high-tech companies will be a true bargain in the eyes of many investors. They always are. I believe that is where a lot of fund money will return. If they have "let's wait and see" attitude regarding AAM the price will stay in this current range. The average investor and management are not strong enough to make the stock go upward. So again it is critical for the shorts to cover or the institutions to jump back in January. We have about four weeks to find out. I really don't see any major upward movement in price until Q-2 earnings come out (or if the shorts cover before hand). If something does not happen on that day AAM may sink lower than $10. Thirdly, I am concerned about a potential acquisition. You had indicated that it would most likely be a bank that would acquire AAM. I agree. But you also said that they might be reluctant to take on such risk. I believe that is the problem combined with what management thinks that the company is worth. AAM has been on the market for close to 12 months now and there are no takers. I have to believe that most every bank has looked at AAM. Why are there no takers? As I previously stated this is a relatively small deal which would probably be all cash. Management may be having a hard time convienceing a suitor of it's worth or potential. Without an acquisition I do not see the price going over $25 a share in the next 12-18 months, unless of course, this whole industry turns around. Any thoughts?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next