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Impac Mortgage Holdings Inc. Message Board

  • dnay1209 dnay1209 Mar 23, 2010 1:44 PM Flag

    Recent Price Decline

    Last quarter, IMPM earned $0.66. The previous quarter, they earned $0.38. If we take these two quarters as being representative of the *new* business (i.e. with all demons dead and buried) IMPM has an average quarterly EPS of about $0.52. This equates to an annual EPS of 2.08, and an approximate current P/E of 1.94. At this rate, why is the price dropping?? Do we have to wait until May (Q1 earnings) for people to believe that the worst is behind us?

    Assuming the earnings remain constant at these levels, a PPS jump into the teens is inevitable... I'm just hoping it will come sooner rather than later.

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    • Guessing we have a new #3 holder, someone bought about 25K today, first time I've ever seen a bid for 15,000 shs, and that's after 2 bids for 5,000 showed up (and traded), So someone bought at least 25K today. I actually sold a few thousand today, but that's it on the sell side for me, just wanted to lighten up since I thought the mkt was getting overbought. I'll probably end up buying them back at $4.50.

    • CD,

      Don't blame me for the GAAP aphorism - saw that first in posts by the investor/philosopher/CPA who called himself "Zorro", and now uses "Stareyed.Stella" as an alias.

      "the bad news is that comparing the Q to the K, Mortgage and Real Estate Services Fees, which is their new IRES business line, dropped $3M in Q4. "

      Yes. It is clearly in the "runoff" mode. If they show no indication that they can write more mortgages, or build new revenue streams from the new businesses - i.e. Title Underwriting and Insurance, R.E. Brokerage, etc. - next quarter then I will cash out completely. As it is I trimmed back this AM...

    • Andy,

      It's not that GAPP is crap, it's that one needs to further understand how those GAAP numbers are calculated so that company financials are meaningful for investment decisions.

      That said, upon further research, much of the big loss on continuing operations in Q4-2009 seemed to be from non-cash stuff. If you could call that the good news, then the bad news is that comparing the Q to the K, Mortgage and Real Estate Services Fees, which is their new IRES business line, dropped $3M in Q4.

    • Andydee, I agree...and this is prob why we havnt seen $10+ yet.....I'm still doubling down on impm...actually I'm doubling down on the sector....I hope whoever sells cuts the thing in half...I have a few bucks sitting on the sideline waiting for a home. GLTA :)

    • repn,

      "I highly doubt this company has came this far to fall apart"

      Well I kind of agree with you - but I think there is still a serious question about how good they can be going forward.

      I suspect the confusing results evidenced in Q4 were a consequence of some GAAP machinations - but I don't know for sure.

      I'm willing to forget Q4 results, but I need to see some evidence that the "new" business platform is generating revenues. At the moment their mortgage origination business is nascent at best, moribund at worse. I will give them some time to start-up the Title Ins business, the RE Brokerage business (aren't there enough RE brokers in Calif?), etc. At the moment all of the service revenues they book are coming from their own portfolio of mortgages - which is in a "runoff mode".

      So, in conclusion, I will likely sell my holdings, all, or all but a small portion to keep my interest in IMPM "up".

      That's just my opinion - and frankly just a short while ago I was willing to wait a bit longer before making this decision. What's changed? I think the market has had it's run for the year. I'm looking to raise cash for the next dip. If you think the market rise will be monotonic, then hold onto IMPM...as someone said, management showed its strength last year by working through all of the issues they were facing...that ought to be worth something. going through all of the issues last year

    • I agree, they have come too far to fail now. In my mind they are in a much better position than when the stock was $1 pre-split, so why now is the stock not $10?

      Also can someone else explain why the 4th Q was .66 not .68?

    • well...I'm in....I highly doubt this company has came this far to fall apart...they've already established that they'll be making more loans in 2010...the gov. is pumping billions into this sector...we might be down now but I'm willing to bet we wont be down for long.

    • CD,

      Clearly I don't understand the accounting here as well as I should, given I've invested my assets in this entity. A reasonable man, knowing his limitations would exit. That's what I will do, unless I get smarter, really quickly, and discover this is really a very good deal...

      You wrote...

      "But the huge drop in earnings from continuing ops in q4, is my concern."

      "Earnings" signify "GAAP" to me. And one of the investor-philosophers I follow on these Yahoo Boards always says "GAAP is CRAP", meaning, in the interest of portraying what is actually happening inside a company, the FRSB has added so many arcane rules that a layman trying to understand if his investment is "healthy", has no chance. So I went back into the 10-K, looking for some potential culprits that I might have overlooked before. Here's what I found...

      >>"Restructured Financing

      In October 2009, the Company entered into a settlement agreement with its remaining reverse repurchase facility lender to settle the restructured financing...(and remove) any further exposure associated with the line or the loans that secured the line. ... the Company
      (i) settled the $140.0 million balance of the reverse repurchase line by transferring the loans securing the line to the lender at their approximate carrying values,
      (ii) made a cash payment of $20.0 million and
      (iii) entered into a credit agreement with the lender (the "Credit Agreement") for a $33.9 million term loan. "<<(Pg 31)

      I don't know why paying off a loan with assets and cash would generate negative income, but as I've already admitted, I don't understand GAAP. Perhaps the some of assets transferred to the lender had to be written down, (change in FV since the last reporting period - despite the mention "approximate carrying value"), and that was charged against GAAP Income.

      OR, if you don't like that, or need something more, there's this...

      The "Residual Interest in Securitizations" fell between the 3rd and 4th quarters - from $29.2M to $23M. (Pg 32 10-K, Pg 36 10-Q(3))

      Perhaps that triggered a change in GAAP Income.

      Any help yet?

      Or are you only somewhat better-prepared than I am to understand these numbers?

      If you do find an answer that satisfies you, pls let me know about it - it will probably make me happy too.

    • Andydee, yes, that is my original question. The jump in discontinued earning, per cc, was from a one-time tax benefit. But the huge drop in earnings from continuing ops in q4, is my concern.

    • Has anyone here done the DD to see how much of Q4 earnings came from continuing vs discontinued operations? From what I can tell from the 10Q's and 10K It seems most of the Q4 earnings came from one-time tax-related events from discontinued operations; and continuing operations actually took a substantial downturn in Q4.

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