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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (24214)	9/8/2000 12:47:29 PM
From: DanZ	Read Replies (3) \| Respond to of 53068

FNV. I have been scalping this stock around a core position with good success..bought a trading position back at 6 15/16 this morning. My best guess is that the stock will trade in a range between 6-7 on the low side and 8-9 on the high side until Moodys raises their rating on Finova's debt. The company met the earnings expectation last quarter and the stock is trading at a trailing PE of only 2. Of course, I could be missing something, but this seems way overdone to me. The dividend yield is about 10% at the current stock price. Even if the company's cost of capital increases so much that they have to cut their dividend, it seems to me that the market has already discounted it. I personally don't see a big cut in the dividend, if at all, in the cards, but as chartseer says, what the heck do I know? The high dividend yield and low PE should limit the downside risk to nil. FWIW, an updated consensus estimate came out this morning. It is only down 1 cent to 58 cents/share for the Sep quarter and down 2 cents/share for the Dec quarter. It doesn't seem as if analysts are concerned that the higher cost of capital will affect the company's earnings in the Dec quarter. Obviously the ratings change won't affect the Sep quarter because it hasn't had time to affect them yet. Maybe the market is seeing something further down the road, but I still think it looks like a gross overreaction.