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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (21251)	5/6/2005 5:09:52 AM
From: blankmind	Respond to of 78850

in full disclosure - here's my earlier post from 3/27/05 - the 2 mortgage reits have gone up - especially when you add the dividends rec'd - & the 4 banks have gone down further - i'm still holding all 6 positions: Here's 6 undervalued financial stocks that make BAC (Bk of Amer) look expensive: - 2 mortgage reits - the analysts are saying they're going to tank due to the Fed hikes - but the companies themselves are saying they're going to continue turning out profits & dividends - these are risky - but i think worth it - here goes: #1 - (IMH) Impac Mortgage - - they're behind on their Sarbanes & 10-K filings - but they're saying they're going to file unaudited 10K - won't effect their dividen payments - etc... I believe them. They pay $3 annual dividend - stock @ $16.42 - range: $16 - $27.91 #2 - NEW - New Century Financial Corp - $32.90 book value - dividends expected to rise from the current $6.20/share level - $9 eps projected in '05 - goal is to eventually distribute 100% of the reit’s taxable income - earned $8.29 in ’04 vs. $6.32 in ‘03 - confident they can increase dividends in future periods - at $44.456/share - i think the selling is way overdone - & 4 recently deumutualized thrifts in & around NJ: · #1 - CSBK - Clfiton Savings Bank - closed at $11.18 - net inc for latest quarter was $.10 diluted; about $.40/eps annualized - but earnings keep growing as ipo proceeds deployed - sitting on several branch offices acquired decades ago & now worth $millions more than reflected on balance sheet - Equity $202.9 mill/14 mill shs = $14.49 book value - but real book value much higher - pays a $.20/annual dividend or almost 2% - just announced a 5% share buyback · #2 - KRNY - Kearny Bank - closed at $11.13 - book value is $23.16 - just de-mutualized so real earnings and dividends not exactly clear but both should be good when they do come out · #3 - ABBC - Abbington Community Bank - closed at $13.08 - on track to do about $.79/eps for year but should be higher as ipo proceeds deployed - $17.34 in book value - actually - this bank is in Bucks County, PA - which borders NJ · #4 - OSHC - Ocean Shore Bank - closed at $10.81 - also too new to determine earnings - but book value is $15.97

To: blankmind who wrote (21251)	5/6/2005 1:18:44 PM
From: MCsweet	Read Replies (1) \| Respond to of 78850

Blankmind, The CSBK results look ok, not great, from an uninformed investor point of view, and that may be the main type of investor looking at these stocks right now. For example, a friend pointed out that Keeley Small Cap Value Fund lowered its small bank exposure recently in December from 10% to 3%, so it doesn't seem like institutions are loading up at this point. I'd say that PE's of 50 or even maybe 25(?) if you adjust for shares actually out in the mkt don't look attractive to the typical value investor. One problem from a short-term price perspective is that if you are right and everyone else is wrong, then you are wrong. Also, the impact of higher rates tends to lag, so I don't think you will have started seeing much of the pain yet (should there be any). I don't know enough to determine how important this factor is, but it could cause prices to deviate significantly from how they have behaved in the past few years. In addition, below book value is great, but what about the relative value question. I see a lot of new thrift ipos beat up badly (i.e., trading below ipo prices) in addition to some other ones on the thread that look cheap --- are your choices the cheapest ones? They may do well, but I'd rather buy the cheapest ones unless there is a compelling reason to do otherwise. I'm trying to be constructively critical here. I do appreciate your posts on these opportunites and am considering buying some. Thanks! MC