so when the dust settles, which subprimes and homeebuilders to pick?

J

jasonjm

Hey all....

so, everything is blowing up.

Lets hypothetically say the credit / mortgage / housing market finds some sort of bottom in 2009/10...

what are your best bets for companies that will have weathered the storm and will be in a position to grow nicely due to lack of competitors?

in other words which subprimes and homebuilders look like they can survive this storm in best shape?
 
Quote from MrDODGE:

CFC
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hmmmm, doesnt wells fargo look better than CFC at this stage?

im talking long term here (2 years+ out), not just because a stock has been punished by bad news?

(btw thats a question, not my opinion)
 
I think Lennar and KB should survive. They have places in every state to hedge their building. Hovnanian looks to be dust, and unfortunately, so does CFC.

In fact, CFC could be that major bank that does not survive this. Damn, I though it would be Bear Stearns.
 
MTH can write off every land option and still have $28/book. That would leave them with just 1 years supply of land. Someone got margined out on MTH today at $16. Should be decent there. Director just loaded up and bought 200,000 shares $18-$21 in last week.

BZH will probably keep having crazy moves from $10-18. buy near Near...sell above $15's. It made $1.2 billion over last 6 years. Will take it a long time to lose enough to create any kind of liquiidty crisis. Debt doesn't come due until 2011-2016. Trading below where it was in 2001 but has $1 billion more in equity.
 
Quote from jasonjm:

hmmmm, doesnt wells fargo look better than CFC at this stage?

im talking long term here (2 years+ out), not just because a stock has been punished by bad news?

(btw thats a question, not my opinion)
More...

Wells wasn't much of a subprime player.
They stick to "A" paper for the most part.
Even during the mania, they weren't much of an outlet for originators who needed something other than conventional.


CFC had a loan for almost anyone. So did FMT, Option One and First Franklin(i think MER bought them).

But yes, Wells Fargo appeared to be strong, also Nat.City and IndyMac.
They were all very conservative when I was writing mortgages.
 
CFC is going to come out of this OK. Personally, I think they will have a nice bounce from here. They dropped today on 5 times the normal volume yet the stock could not finish near the lows of the day. Sounds pretty bullish to me.
 
Quote from HolyGrail:

CFC is going to come out of this OK. Personally, I think they will have a nice bounce from here. They dropped today on 5 times the normal volume yet the stock could not finish near the lows of the day. Sounds pretty bullish to me.
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Maybe, but honestly, I wouldn't touch any of these companies.

CFC took on a lot of shit paper, and even beyond that they convetional loans let a lot of garbage slip through.

I posted this many times before, there was a lot of FRAUD being commited.
I'm really surprised we haven't seen any perp walks yet.
 
The stock is at the perfect fib of 161.8. Placing an order with a stop of 19.75 would not be a very big risk.

I do agree, they have taken many risky loans, but they sell many of them too. I think they will have some problems generating new income, but I don't think they have a lot of bad paper.

Of course I could be wrong.

They are my mortgage company and they DRIVE ME NUTS calling me trying to get me to refinance my 5.5% 30 year fixed mortgage into a lower rate adjustable.:D
 
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