Blood in the Streets?

[DOGS THAT BARK]

Stock in question is AHM a mortgage company--stock has been battered on subprime ordeal--had some not so good news this morning and see where it is down $1.86 almost 9% in pre market trading--just put in buy order
Reason is they reaffirmed 70 cent div ex date 7-7 and hope most the negative aspect has been accounted for and hoping to make some change at least on 7-7 div.

They say don't catch a falling knife but--
Will update how things went--will put in price bought tonight--headed out for a little golf before market opens.

pre market news--
http://biz.yahoo.com/ap/070629/american_home_mortgage_ahead_of_the_bell.html?.v=1
++++++++++++++++++++++++++++

saw where I bought @ $18.29 at opening--look to sell on 8th after div ex date--will update then.

 

[djv]

You may have got it at right time. Hope stock price holds or just dips tiny bit and you will make more golfing money. Talking about golf after bad back for few years. The clubs been sitting in basement last 7 years. Said it's time to try my rested back out. Did all the warm ups stretches etc. Took that mighty swing a 65 year old can. That ball went at least 75 yards. The strange part was the ground shook because it went about 100 yards straight up. This gal waiting to go out with next group. With a straight face said nice swing. Good thing there were no clouds it be raining. Now if that don't make you feal like the clubs should go back in basement///. And the 53 I shot did to. Ah yes for 9 holes I didn't give up after 8.

 

[DOGS THAT BARK]

Been watching these stocks that have mega negative press on a day--and they generally have significant drop intially and then have modest recovery--figured I had 70 cents a share to work with--so risk was reduced somewhat.

We'll see how it turns out--did set stop loss @ $17 to risk of free fall --and hope to raise that just prior to div ex date as look for many to sell on that day.

 

[DOGS THAT BARK]

Decision Time
--Was confused whether Ex Div date 7-05 or Statement of div date 7-09 would apply.

So opted not to make mistake and miss div and take the later which makes today the date to shit or get off the pot.

Stocks closed 17.66 and pre market has it down 11 cents currently @ 17.55--in I add the 70 cent div paid and bought @ 18.29 and am setting @ 4 cent loss per share.

No prob taking that--but all indications are they will continue div- and if so would give $1.40 hedge over next 6 months--decided to keep stock and set new stop loss at $16.50 a share to limit risk--
--if $2.80/share yearly div continues and possibility stock rebound lot of room on upside--however would be quite content to have stock continue in $17 range and get 50% of current div.

--will update on any changes in future.

P.S. I welcome any comments on suspect flaws to way this thinking--or additional comments
--I'm here to learn--and most of time its from past mistakes.

 

[selkirk]

DTB not surprised they kept their div this time. they have had to annouce negative news, also they may have to issue more debt, preferreds, converts, if that is the case they will probably not want to cut the div.

as soon they cut the div the stock would fall, however it would be wise for them to quickly raise cash, (the amount they need, if they can) and then reduce the div. to a more managable level.

the stock will probably trade on the noise of the market (mortgage market) more than company news, in the short term.

thanks
selkirk

 

[DOGS THAT BARK]

Thanks Kirk--

Got another question--what source do you use to get up to date accurate info on company.

Example on ACH's PE info i get the following at 3 diff places as I type.

Yahoo/3.39
Reuters/13.56
Morningstar/54.3

Yep no typo--they range from 3.39 to 54.3
I know Yahoo's is very old and never changed but still BIG diff Reuters and MS.
===============
AHM sold this morning on stop--about a $2 a share loss on this little experiment.

 

[selkirk]

DTB I use bloomberg, mainly, also have used Reuters from time to time.

have 5 brokerage accounts some full service and dicsount, and use their research information, and services.

also subscribe to a cdn. service that gathers news sources together, very good for the money.

for mutual funds morgingstar, and globefunds (cdn.).

as for the numbers it is often hard to find out the true numbers of some of these mortgage lenders.

in Canada, there was a company in the mortgage market in the US. they listed in Canada, not sure if it was a scam or just idiot management of the century, probably a little of both....was a scam.

anyways the rate went up a half and the comany went from 10-to zero. of coarse I bought in (around 8.75, and went up 20 cents and got a div, however the stock just kept on dropping.

lost 8%, sold because every trust was doing great and stock and this just slowly fell. note: 8% loss counts the monthly div I got.

Yahoo is trailing pe, reuters is close to the current estimates.
not sure on moringstar however with the recent news maybe based on forward pe, or on a different estimate.

have to be most carefull using yahoo, they have good info, it is just that often they include one time items in earnings. make it look better than it is....

ie: one time owned a stock that sold a division. a one time gain, yahoo included it in earnings....it is a one time gain though.....not ongoing.

finally hard to say how this will do however I hate to buy into companies sectors when the market is worried, scared and do not want anything to do with them.....
guess that is why do not play turnaround stories often.....do not ussually get it correct.


thanks
selkirk

 

[DOGS THAT BARK]

update on this one--ended up losing a little more than $2 a share as div paid on 7-27 was taken back on 7-31

07/31/07 Cash ORD DIV CXL ENTRY AHM -350.00
07/27/07 Cash ORD DIV 500 AMRN HOME MTG 500 AHM 350.00

--could have been worse though--was fortunate to bail then-


American Home Mortgage to shut down
Turmoil in credit markets, ongoing housing slump hit nation's 10th largest mortgage lender; almost 7,000 workers to lose their jobs.
August 3 2007: 4:06 AM EDT


NEW YORK (Reuters) -- American Home Mortgage Investment Corp. plans to close most operations Friday and said nearly 7,000 employees will lose their jobs as the lender becomes one of the biggest casualties of the U.S. housing downturn.

Experts said it is likely the Melville, New York-based company will have to seek bankruptcy protection, and no later than Monday.

In a statement, American Home (Charts) on Thursday night confirmed earlier reports that it was ceasing most operations. The company said its employee base will be reduced to about 750 workers, down from the 7,409 it reported at the end of last year. The terminations are effective Friday.