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First American Financial Corporation Message Board

  • nematode_speculator nematode_speculator Dec 14, 2001 6:19 PM Flag

    Sell this Stock Now!

    FAF is extremely overpriced at these levels. Those of you hoping for a rebound will be sorely disappointed. Its first problem, little noticed by analysts, is its dangerous propensity to accumulate cash. The last balance sheet indicates that this turkey has managed to pile up $8.78 in cash overload. Business is apparently so poor that management hasn't a thing to do with all this money. Further, the cash continues to pile up. Indications are that cash levels may exceed ten bucks a share by the end of 4Q.

    Making things worse, the company now admits that backlogged title orders are at all time highs. So don't expect relief anytime soon.

    You might think that a company could dispense with this troublesome cash hoard by paying down debt. Trouble is, the nincompoops that run this company have somehow managed borrow money for little or no interest, confounding their cash severe problems.

    To complicate an already tough situation, FAF's book value is growing dangerously high, threatening to over take the share price, which would cause the company to degenerate to the sort of loser outfit that sells for less than book value and a middle single digit P/E ratio.

    No, the sort of company you want to own is Amazon.com, that always has a use for more cash, never letting to rot on the balance sheet. This point is proven by the indisputable fact: Amazon sells for 4 times what this clunker FAF sells for.

    Sell this POS before they do some idiotic thing like buying back shares.

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    • nematode speculator: Either you are kidding or you have just written the STUPIDEST post on any board, anywhere at anytime! Like a person, no company can ever have too much cash, it just needs to figure out how invest it wisely. Did you ever have too much cash? I never did. As for Amazon.com, it never has made any money and it never will. In honest terms it is what is known as a scam! They do not intend to make money from their customers, they intend to get it from the idiots on Wall Street. Wall Street and the current investment market seems to have forgotten is that the hard part of business is to make your customer happy and make a profit at the same time. Companies that don't make profits end up like Enron and someday Amazon will join Enron in Chapter 11 bankruptcy court where they belong!

      • 1 Reply to pmlljl
      • Thanks for the thoughtful response, pmlljl. And I certainly think that its refreshing that you state with candor that you are short of cash and could, indeed, use more at this point. So often here on the internet one is more often likely to see ridiculous boasts of unheard of wealth.

        If I may infer that your recent investments have led to your present condition of penury, I can only imagine that your misplaced belief in "cash" being somehow conected to shareprice has directly caused your predicament. The plain facts of the FAF situation certainly contradict your "theory." FAF has doubled its cash position since the first of the year, while at the same time the share price has plunged a depressing 40+%. Accordingly, I am in total sympathy with you lashing out against me, the messenger, calling me the "stupidest," etc. You also mention Enron, so I can only assume that you have also lost good money in that calamity as well. My prayers are with you and your family in this holiday season and only hope that you may disabuse yourself of the errors of your investment misconceptions, before its too late.

    • Great Post! LOL!!!

      Go nematode!

    • Thanks for the heads up. I got so scared, I bought 1000 shares instead of selling.

 
FAF
38.14+0.21(+0.55%)May 27 4:02 PMEDT