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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: drakes353 who wrote (1053)	5/14/1998 8:44:00 AM
From: Alan Newman	Read Replies (2) \| Respond to of 2506

drakes353, Thanks for the list of E & D stocks. How did you compile that list? Alan

To: drakes353 who wrote (1053)	5/15/1998 5:26:00 AM
From: Q.	Read Replies (1) \| Respond to of 2506

Drakes, re PAMCE <<Here are current the Naz/NazSC, over $5 "E"s as of the close 5/13......EQMDE, IICRE, PAMCE, WHELE (TRIIE continues to be halted last I checked.)>> PAMCE looks interesting. Like SWSHE, the reason they are delayed is the auditor quit on them. PAMCE is an insurance co., which is an industry I would rarely mess with. However, I notice that their NT-10k said that: * they are unlikely to file a 10k until June, and * they expect signficant writeoffs resulting in net earnings for the year of about ($20M). It turns out that their shareholders equity at the end of 1996 was $22 M, so it appears their book value will go nearly to zero. Book value is not very important for tech companies, but isn't it a big deal for insurance? I think insurance co.'s are sometimes valued based on p/book, (industry average is presently 2.6) and perhaps insurance rating services like A.M. Best use book value too, to rate insurance companies. So .... maybe the stock will be delisted, and if not, then they will report a big loss, price/book will become pathetic, and A.M. Best might downgrade them from their already-low rating of B- . I wonder how much more time NASD will give PAMCE than they gave to SHSHE. NASD doesn't seem to have a fixed time scale for delisting. Late last year IFMX, which is a big company, was late filing because it was restating its results after finding irregularities, and the NASD gave them a whole lot of time and ultimately never delisted them. Little SWHSE on the other hand got axed about 6 weeks after its 10k was due. Based on market cap, PAMCE is closer to SHSHE than IFMX, so maybe NASD will treat them correspondingly? Short interest in PAMCE is negligible, float is 7.5 M, so it seems likely to be borrowable. Volume is thin, though, so spread might be high. Market cap is $66 M. PAMCE has two analysts: Emerald (they touted Zitel, didn't they?) has a buy (see below) Stifel & Nicolas (unfamiliar to me) have a sell. <On April 8, 1998 Emerald Research analyst Joseph Besecker issued a 2 page Company Report on PROVIDENT AMER. Report highlights: " Coverage was initiated with a SPECULATIVE BUY rating primarily because of the company's plans for a turnaround in 1998. The company would like to focus on improving its underwriting criteria, address policy pricing issues, tighten policy controls and outsource insurance administrative functions. In particular, the company wants to begin an internet-based direct distribution model to position itself as the lowest cost insurance provider. The 12 and 18 month target prices were set at $9.50 and $15, respectively. " >