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American Business Fin'l (ABFI) Message Board

  • bfg93105 bfg93105 Jun 18, 1999 3:09 PM Flag

    ABFI is rolling between

    10 & 15. Ride the wave. Come to our free stock trading club,BBS,chat room(9pm ET) with traders to answer questions,basic ed website and more at:

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    • Doesn't appear to be 10/27. Perhaps 11/16 like Searchin' said. Yesterday was strange: I thought we were going lower, but am glad we didn't.

      (free service)
      The bid/ask is realtime (or pretty
      close), and the volume and chart information is delayed
      by 20 minutes. The "Last" price is sometimes real
      time and other times delayed, so it can be confusing.
      I checked the timing against Fidelity's "real time"
      quotes and Fidelity's quote was older, even though does not claim to be real time.

      certainly more up to date than Yahoo quotes.

      was a really strange day. Looks like major volatility
      is just ahead.

      Good luck.

    • What company do you trade through, or do you trade on line? You are able to see much more of the Bid/offer information than I can.

    • My question is:
      - When does ABFI expect to
      start seeing a positive cash flow?

      these questions at a conference call would be nice, but
      it would be even nicer if management could answer
      them here. Public Bulletin Boards are just another
      communication vehicle for investors (no different than CC). It
      would be encouraging to investors if management would
      respond to our concerns/questions and also summarize the
      companies long term goals.

      Now it may seem out of
      the ordinary to envision management posting on a
      Yahoo BB, but let me relate another story. In the
      summer of 98, I was following Netbank (NTBK) on the
      Yahoo BB. The stock was languishing and there were
      concerns about the quality of their WEB site. Sometime in
      Aug, the CEO (D.R. Grimes) posted in response to the
      concerns on the BB. He also laid out the plans of the
      company and asked for suggestions and feedback. The stock
      was then around $7 (split adjusted). It later
      exploded to over $70, and is now back to 20. Of course I
      never bought (another fish that got away), but I
      remember thinking "there is a CEO that responds to
      shareholders, investors and customers". It wasn't much, just a
      note explaining what they are trying to do, but the
      dialogue helps build confidence among investors and
      customers. I think ABFI can also benefit from this kind of
      positive public relations.

      So, Anthony Santilli Jr.
      we would welcome your response to our questions.

    • I should point out that the securitizations are a
      form of long term financing. The long-short term of
      financing question is really only applicable to the use of
      notes to fund leases or home equity loans.

    • Here's my list:

      How will the company
      mitigate the effects of borrowing short and lending long
      in a rising interest rate environment?

      plans does the company have for strategic acquisitions?
      How will the company pay for such acquisitions in
      such a way as to minimize dilution of existing

      How much does the company plan to budget
      for internet advertising and strategic partnerships
      with portal sites?

      Does the company have
      sources of emergency liquidity in the case of a liquidity
      crisis brought on by unexpected business or financial
      developments such as a market crash?

    • These are all good questions. Does anyone think we should organize them, with the intent of asking management directly during the next conference call ?

    • Malakhan wrote:
      >> Also, ABFI has tended
      to borrow short and lend long, which is great in a
      falling rate market, but bad in a rising rate market.

      You hit the nail on the head! This is the risk
      inherent in this stock (IMO)! As long as rates continue to
      rise, it gets more and more difficult to maintain
      earnings and guarantee that cash flow from servicing
      rights will accrue. Because of this, the market (and I)
      considers this a high risk investment and hence the low PE.
      In the past, many institutions have failed to
      negotiate this environment.

      On the other hand, if
      ABFI can maintain reasonable earnings in this rising
      interest rate environment with continued revenue growth,
      then this stock will be poised for a dramatic move
      upward when rates begin to trend down. That is when
      financial stocks are supposed to move, and it is especially
      so for highly leveraged ones like

      finance_geek wrote:
      >> if the company continues to
      put on $10MM+ in sub debt per month, when does it
      blow away earnings? <<

      The company
      presently has negative cash flow (since some of their
      earnings are represented by future income streams), and
      they use the sub debt for current funding. If they can
      survive the current environment, margins will improve
      (from lower rates and a larger loan base), as well as
      cash flow improving (from servicing rights beginning
      to kick-in). If they can walk this tightrope, then
      they can begin to lighten their debt load and see
      improved margins fall to the bottom line. That is when the
      stock will fly. But for now, I think it's a waiting

    • Remember I'm not a numbers guy for this answer.
      As long as the company can originate loans at a
      higher rate than the sub debt, sub debt won't hurt
      earnings, it will increase earnings.

      However, as
      your debt increases, you risk that a slow down in
      business will leave you with cash that isn't performing.
      Not a problem for ABFI. The other risk, which would
      be the problem for AFBI, is a timing problem. The
      more debt you have, the bigger the interest payment
      you have to make on schedule, come hell or high
      water. A severe fluctuation in your cash receipts could
      make you miss an interest payment. This is probably
      why ABFI keeps such a large cash cushion, several
      million dollars. At some point, because of these timing
      issues, you hit a point where you stop borrowing, even
      though every dollar borrowed could still be used to
      build your earnings up.

      Also, ABFI has tended to
      borrow short and lend long, which is great in a falling
      rate market, but bad in a rising rate market. They
      will probably look to find some longer-term fixed rate
      funding to offset the short term notes. Preferred stock
      or longer term debentures, maybe.

    • help me with this:
      if the company continues to put on $10MM+ in sub debt per month, when does it blow away earnings?

      and b/t/w, debt/cap =85%+


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