what are they going to tell you on a conference call that can make you money or keep your assets in place. i am making it very easy on you, buy gold and sleep at night. buy ago and you will wind up with indegestion,
i am an unpaid pumper, unlike others on this board
Getting a billion bucks back from Countrywide is a good return of capital, however, it is no replacement for "new business". AGO's share price is a function of forward operating earnings, NOT ad hoc returns from investments.
Company is going to make 3-5 bucks per share in 2011 AND may get a billion back from BAC/Countrywide and others.Too bad they cannot buy stock back when adjusted book is 48 bucks per share. However Ross can.....
"Screaming buy"? I agree with half of that statement, it is a "buy" at 18 bucks.
A couple of things. First, Balance Sheet asset quality? Still worrisome. While the assets are better than many other financial companies, they are still creating losses.
Second, an increasing amount of internal resources are being dedicated to obtaining put-backs, minimizing damage that RMBS portfolio can cause. It is a high cost to pay for recovery. It is a must do thing, but it is an investment that doesn't convert to business growth.
Third, operating income is going the wrong way. Fortunately, it exceeds losses from RMBS losses. $4 oper. earnings/year is far from being "in the bag" for 2010 or 2011.
Bottom-line, you have to believe that there is not going to be another credit freeze and another subsequent dip in asset values, spelling disaster for AGO. There is plenty of value in AGO in an economic recovery, BUT there is an equal amount of risk of another leg down if issues in Europe crisis spread.
I'm very long AGO, but I am also VERY nervous (uncertain) about what the future holds. Wilbur has to be worried as well.
I agree with everything you say, even if you are with KPMG. :) But I've missed out on so many opportunities this year because I've kept so much in AGO. I made a killing on AGO last year, but this year, AGO is killing me. Perfect takeover opportunity I think. Wish I had a few billion to throw at it.
earnings power here is tremendous. Short term thinking on bogus estimates that are hard to measure quarter to quarter are driving prices. If they were making .47 per quarter with book value of 40 without people playing quarterly estimates where do you think this would be trading?Many banks are making nothing and trading on normalized earnings. Normalized earnings here is over 4 bucks per share.