CCRT and FMD
CCRT is now trading like the company is going to earn about $3.00 this year instead of $4.00. Investors are trashing everything that is subprime, period. I can understand the thrashing of subprime mortgage lenders where defaults are soaring, but it's much easier to make a minimum credit card payment than it is a mortgage payment. So far, there is no evidence that the fallout from subprime mortgages is spreading to other areas of consumer credit, but there is a lot of FEAR that it will. I'm sticking with CCRT, but will be more cognizant of the credit cycle in the future because I hate riding stocks down.
I purchased more FMD today. The stock is dirt cheap and in an excellent buying position IMO.
I purchased more FMD today. The stock is dirt cheap and in an excellent buying position IMO.
posted by Never-Limp at 11:57 AM
2 Comments:
I agree with you that FMD is cheap right now... I really want to buy more here, but I'm hesitant only because I've got a fairly full position.
Still holding off on CCRT, but I might nibble at it soon.
Have you any thoughts on WM? They definitely are affected by sub-prime, but I think the stock is starting to approach attractive price levels.
I just can't buy any mortgage related stocks yet because I think the housing situation is really, really bad. The price of homes compared to income levels is still extremely high, so pricing will be flat to down for at least a few years IMO which hurts refi activity and causes defaults to go up. Also, I've seen estimates that about 750K families will have to go back to renting because they can no longer afford a home. Fewer people in the market for a home means less transaction activity. On top of all this, new legislation could hurt transaction activity and make it more costly for motgage companies to do business.
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