Don't Panic, this selldown is to rattle shares lose from investors that don't realize the value at hand in MBI shares.
1. MBI shareholders just received $10/share in cash.
2. Book value is $17.03/share
3. PE ratio is 1.97/share
4. MBI shareholders will receive nearly $800 million/$4 per share in cash from Ally settlement in few weeks.
Now, if you understand why they will try every trick in book to get your MBI shares from you, you are hopeless.
Several reasons why investment managers want MBI:
1. Unlike Ambac, mbia carries a positive net worth of $4 billion, versus Ambac's -$3 billion net worth.
Add Fannie and Freddie to the negative net worth crowd. Like Radian and MGIC, they all have potential.
2. Liquidity is strong at MBIA. Prior to $1.7 billion settlement, the company had nearly $400 million in cash and liquid assets. In less than 4 weeks,, add Ally nearly $800 million more.
3. Risk from threatening CMBS have been removed from balance sheet.
4. Investment grade ratings, although investors have been playing with Fannie and those names mentioned about. They know deep down inside, those companies still too much risk to sleep at night.
MBIA book value went from $13/share to $17/share from operating income not secondary offerings. MBIA will add $924 million to pre-tax earnings from investment grade ratings.
Of course they will add from shaking the weak out.
What about the improvement in MBIA CDS, as it relates to less risk from real estate policies and ratings companys upgrades.
MBIA has said that a three notch upgrade will increase pre-tax income by $903 million. Do you ever read SEC 10-K and Q?
The metrics you mention are really secondary. When the company starts posting credible increases in revenue, operating income, cash flow and an improved balance sheet, that will be the real measurement of shareholder value. This company has been "cleared" to survive. Soon the news and hype will all be baked in and the company needs to produce the numbers; that's what I'm looking for.
I don't believe in your conspiracy theory that there are people out there trying to trick you out of your MBI shares. It's a market. Markets rotate. HOPELESS?
Hi tommie. Don't forget, the recent $1.7 billion settlement goes directly into the wholly owned subsisdiary to pay off the debt that the subsidiary incurred in the first place. Don't get me wrong, the settlement is great news, but it seems extreme to view it in terms of "$10/share in cash".
I think the settlement will mean that the subsidiary will now be in a position to pay a dividend, since it no longer has an interest expense.
Funny. When people sell at 15 to 16 you call them FOOLS. Now when people sell into the 13s you call them Weak. Without putting new money in this stock, maybe this is just a good time to average down. Who knows?
I know you don't buy the conspiracy theory however, why is Factset showing MBIA earning, negative -$19 cents in 2014 and Thompson Reuters show them earning $7 million, when they earned $1.4 billion in the last 12 months?
MBIA has surprised to the upside by nearly 1800 percent 2 of 4 times over the last 4 quarters.
Yes, this is true, when people sell at $15 to $16 they are not realizing the potential of this stock so they are fools to sell it so soon. When you sell into the 13s, then they are weak because they are selling due to panic.
I think you are a basher here or a shortie. Yes, I am long term holder and will continue to hold this gem for even longer. I am hoping that MBI will easily double within a year from now. Mark this post!!!
Sentiment: Strong Buy