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  • girthner21 girthner21 Feb 10, 2011 10:50 PM Flag

    o23ffs

    Thanks for the tip on RAS, I stupidly sold my position in RAMR at $1.25, but made a quick grand in RAS. I am trying to decide if I should buy back in to RAMR. Is the risk reward still worth it at this price? By the way, Eaton Vance is valuing their 18,000 RAMR series A shares at $.35 cents on the dollar....and that is as of Nov. of last year. I know USAA still, or at least reported they still had 10,000 of the series A shares as well towards the end of last year.

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    • Girth, I neglected to mention the valuation on the preferred.

      That 35 cents on the dollar is too close to the repurchase offer that RAM made almost a year ago to be anything else. The preferred is not traded, and all calls to the agent to sell the stock are referred to RAM. So that number constitutes a fair valuation of the preferred.

      Since no holders are stepping forward, one could argue that the preferred is worth more. If RAM's status changes within the next six months, it's likely to be driven by the two new directors screaming at the top of their lungs, "Show me the money."

    • Girth, your question on RAMR is a tough one. For what it's worth, here's my best answer.

      RAMR has probably had its recent run based on rumors. Unless there's another flurry of rumors, the stock will move only slightly until the news connected with the rumors is released, then probably pull back to $1.25 to $1.50. Most investors that entered over the last two months are in it for the short term, and will exit when the FGIC agreement is announced.

      For the longer term, I expect the stock to be worth $5 within two and one-half years. A buyout now would probably be successful at $3.

      It's important to note that about nine months ago, RAMR cut a deal with Calliope to hire the entire RAMR staff, and allow RAMR to use them as needed, paying all costs. The agreement was for three years, which I interpreted as the most likely duration of the runoff. The agreement may also make it less likely for a takeover; however, Calliope holds 38% of the common so probably doesn't need more leverage.

      If you wait for a pullback to make a purchase, you may have to own the stock for six months or more for a payback. If you buy at this level, chances are you will be in the red for awhile.

      RAS may present a much better opportunity. If you can hold back and RAS sees $3.25 or less again, I sincerely recommend that you buy every share you can.

 
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