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TranceAddict Investors Club @ Marketocracy (pg. 32)
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| Krypton |
BRK
FS = 64
Gamma = 0.75
Yield Ratio = .19
PEG = 1.5
Intrinsic Strength = 2.72
Warren Buffet is a genius, but BRK is expensive. The fundamentals are average. The price is overvalued. I believe investors are starting to realize its expensive, so it's fallen a bit from its high. |
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| Krypton |
| quote: | Originally posted by Shakka
I strongly disagree with you on FMD. Aside from the credit market decline their stock has been heavily sold because their business model is broken. Their margins are unsustainable, the competition is heating up, they have only been granted a temporary reprieve since the SLM/Flowers deal fell throug, but JP Morgan and BofA are their biggest clients and are moving production in-house. Watch this ****** bleed back down. The only difference between today and yesterday is that FMD is no longer destined for zero and Tom Brown saved a little face. Furthermore, they cut the dividend today. Today's action merely illustrates how desperate they were for a lifeline and how oversold the stock has become (down 70% in December alone).
But I congratulate you on making good profits even if you are wrong about the fundies. |
So why did Goldman Sachs invest $260 million today? A 20% stake is a huge stake. Plus Goldman is the best bank right now in the market. FMD may or may not fall back to the support line, but if it does, long-term it won't matter. The student loan industry have very positive growth trends that won't stop because of a mortgage market slowdown.
FMD's portfolio remains strong, and it will whether the credit crisis better than the home lenders. |
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| Shakka |
| quote: | Originally posted by Krypton
So why did Goldman Sachs invest $260 million today? A 20% stake is a huge stake. Plus Goldman is the best bank right now in the market. FMD may or may not fall back to the support line, but if it does, long-term it won't matter. The student loan industry have very positive growth trends that won't stop because of a mortgage market slowdown. |
First of all, this is not just because of a mortgage market slowdown.
Secondly, Why did Morgan Stanley buy Saxon only to write it off? Why did Farallon throw $200 million at Fremont General? Why did Bank of America throw a $2 Billion lifeline to Countrywide only to see the stock run up 30% and then only to fall another 63%. Poof. Why did every other hedge fund throw gobs of money at failing companies only to see their stock prices plummet right back down again? Why did Jim Flowers balk at Sallie Mae? Why did FMD fall 80% from $55 down to $11 this year in the first place?
$260 million is a boondoggle for Goldman. It's a drop in the bucket! Lloyd Blankfein just got a $68 million bonus today for chrissake. Maybe you should ask why they didn't buy an even bigger stake? A 20% stake means nothing. 20% of a piece of is still a piece of . Bad assets are bad assets. They didn't get any better in quality just because Goldman pissed fairy juice on it. "Just because Goldman Sachs did something," is not a valid argument. In fact, the result of the transaction happens to be a dilutive transaction that's actually beneficial to shareholders. And they've suspended the dividend. Things are going swimingly! A 65% rise in the stock price based on a whiff of hope is absolutely warranted! I certainly don't think so.
It's vulture investing and sometimes it works. I have done the research and I believe that structural problems exist and that this infusion doesn't address the problems. It's just a band-aid for a bigger gaping wound.
| quote: | | FMD's portfolio remains strong, and it will whether the credit crisis better than the home lenders. |
On what do you base this opinion and how can you be so sure?
Do you really understand what it is that First Marblehead does? Here's a tip. Hedge your position with some long-dated puts. You should make money.
On a side note, I love how Paulson's brilliant SuperSIV was officially abandoned today. Spin spin spin. |
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| Krypton |
Ok, FMD suspended its dividend. It's earnings yield has changed too. Let me make some changes to reflect the current conditions...
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Ok, from a micro-economic standpoint, I still think FMD is a diamond in the rough. Macro-economic waters look rough, but that aside, I still believe FMD will whether the storm as their financial statements indicate a fiscal responsibility that's virtually non-existent within other areas of the credit market. They've got plenty of cash and assets to cushion the blow from the current bear market. These assets are good, which is why I say their portfolio is still good, good enough for Goldman Sachs to want to buy a huge position in the company. And I have to give Goldman a bit more credibility than if Washington Mutual or Citibank did the same thing. Goldman is practically the only bank to even have a profit during this 3rd and 4th quarter. They've been doing things right, so when they make an investment in FMD, I have to basically accept they may be onto something. And a vast majority of other institutionals thought the same thing, giving the Goldman deal such credibility of confidence in FMD, that the buyers came out on mass. Student loan defaults may be increasing this quarter, but that's to be expected in any economic down cycle. It certainly won't reach the levels of home foreclosures. The fundamentals are just different between them. Student loans are better because people usually pay them back especially when the purpose is to obtain a college degree, and thus, a higher wage income, so loans are better able to be paid back.
FMD's new Intrinsic Strength after Friday's huge runup is 17.05, still VERY high. I accounted for new price ratios, new relative strengths, change in dividend yield, and a higher PEG at .14.
FMD is still VERY VERY cheap. I think the stock is worth in the $32 - $44 range. I strongly believe the student loan industry will more than recover. I believe FMD will weather the storm. Once a support line is reached, I might buy some FMD with real money. I'm going be putting my money down on this IS model of mine, and so far, I have faith in it.
I'm just gonna have to disagree with you Shakka...:D |
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| Krypton |
More on the Goldman deal with FMD. FMD is ensured at least $1 billion dollars in financing from Goldman Sachs plus cash from the sale of 20% of shares outstanding. FMD has everything it needs to hunker down while this credit storm rumbles by. The intrinsic strength agrees, Goldman Sachs (best bank America) agrees, and future growth estimates agree; FMD is the next turn-around stock. Mark my words!!;)
| quote: | Goldman Gives, Goldman Profits
Andrew Farrell, 12.21.07, 4:00 PM ET
First Marblehead received a cash injection Friday that will shore up the company's financial footing during a stormy period in the student lending industry. Its benefactor is Goldman Sachs, which stands to collect a handsome profit from the deal.
Goldman Sachs (nyse: GS - news - people ) will invest up to $260.5 million for as much as 20.0% of First Marblehead (nyse: FMD - news - people )'s outstanding shares. As part of the deal, Goldman Sachs will also provide the company with up to $1 billion in financing.
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http://www.forbes.com/2007/12/21/first-marblehead-update-markets-equity-cx_af_1221markets22.html?partner=msn |
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| mndeg |
| I think they talked about FMD on fast money, they said the dilution was only 1% and that it was greatly oversold. |
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| Krypton |
| quote: | Originally posted by mndeg
I think they talked about FMD on fast money, they said the dilution was only 1% and that it was greatly oversold. |
Very much so, which is why I think my model found the intrinsic strength of FMD to be so high. Before Friday, FMD intrinsic strength was around 24. After Friday, FMD is now at intrinsic strength of 17. Huge drop, with huge gain, but still, at 17, FMD is still my most undervalued stock I have on my watchlist, WITH the 60% gain Friday. |
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| mndeg |
| My bad the 1% was referring to ADCT. |
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| Krypton |
| ADCT does look oversold. Looks like it reached a support zone. It also looks like it's downtrending though. The 50day MA crossed below the 200day MA confirming a downtrend. |
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| mndeg |
| the fundamental reason is that they issued convertible notes shareholders were scared of dilution but it was only 1% |
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| Krypton |
December 21, 2007 funds report for (tranc3)...
KFSF
* Name: Krypto Fundamental Strength Fund
* Net Asset Value (NAV): $11.25
* Compliant: Yes
* This past week
+ Return: 1.83%
+ Did you beat the:
o S&P 500 (return of 1.12%): YES
o NASDAQ (return of 2.13%): NO
o Dow Jones (return of 0.83%): YES
* Trailing 30 days
+ Return: 5.31%
+ Did you beat the:
o S&P 500 (return of 4.78%): YES
o NASDAQ (return of 5.07%): YES
o Dow Jones (return of 5.09%): YES
KGF
* Name: Krypto Gamma Fund
* Net Asset Value (NAV): $10.65
* Compliant: Yes
* This past week
+ Return: 2.80%
+ Did you beat the:
o S&P 500 (return of 1.12%): YES
o NASDAQ (return of 2.13%): YES
o Dow Jones (return of 0.83%): YES
* Trailing 30 days
+ Return: 5.16%
+ Did you beat the:
o S&P 500 (return of 4.78%): YES
o NASDAQ (return of 5.07%): YES
o Dow Jones (return of 5.09%): YES
KSGF
* Name: Krypto Short Gamma Fund
* Net Asset Value (NAV): $9.70
* Compliant: No
* This past week
+ Return: -4.45%
+ Did you beat the:
o S&P 500 (return of 1.12%): NO
o NASDAQ (return of 2.13%): NO
o Dow Jones (return of 0.83%): NO
* Trailing 30 days
+ Return: -3.01%
+ Did you beat the:
o S&P 500 (return of 4.78%): NO
o NASDAQ (return of 5.07%): NO
o Dow Jones (return of 5.09%): NO
KHYF
* Name: Krypto's High Yield Fund
* Net Asset Value (NAV): $10.60
* Compliant: Yes
* This past week
+ Return: 10.75%
+ Did you beat the:
o S&P 500 (return of 1.12%): YES
o NASDAQ (return of 2.13%): YES
o Dow Jones (return of 0.83%): YES
KISF
* Name: Krypton Intrinsic Strength Fund
* Net Asset Value (NAV): $10.97
* Compliant: Yes |
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| paranormal-real |
| RIL: Will continue to grow and is expected to double due to their refinery to begin full operation and since they are also building a refinery in Guatemala....buy the stock. |
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