Does anyone know what level INV has to write per month to break even? I would imagine it's less than $300 mill per month. So $800 mill - while less than other months - would keep INV comfortably profitable.
"Does anyone know what level INV has to write per month to break even?"
Here's a couple data points: INV's first reported profit was the the fourth quarter of 2002 -- $.59 on $1.9B production ($633M average). Their first profitable month was September 2002, on volume of $485M.
Their cost structure was different then. They've since obtained economies of scale by growing existing offices and amortizing centralized costs over more volume. But they've also increased costs per unit of origination production by adding more offices (fixed costs).
The third quarter, and more so, the fourth quarter will reveal how scaleable INV operations are -- the impact of marginal increase/decrease in production per account executive.
I'm just brought some INV to take advantage of the low mortgage interest rate. Since the rates have declined 0.50 since the high of July, I believe 800 million for September production is on the conservative side.
I am also currently invested in TFN, a small competitor in the same sector, with huge growth potential. They have operates in the west coast, California and Washington.
- I hope you're not saying INV is the same as TFN. TFN may do much of what INV does. But TFN's loan volume is drying up; they're cutting expenses; etc... Also INV does about 7 or 8 times more business than TFN. If anything, TFN won't have the scale to go forward. Having said all that. If INV shot up to $50; and TFN remained at $1.41; then TFN may be worth it. But side by side, I think INV is much more the value.