How far down is it going? Are we near the bottom now?
Hypothetically, what if earnings stay at $0.50 per quarter for a long while?? In downturns, things get tough. Everybody files claims, people sue each other, it's tough. If eps falls to $2 a year, the typical P/E for this stock has been 9 or 10, ... is $18 to $20 a possible price target? Too pessimistic?
In the teens, I think I would add shares and then hope for a real estate recovery.
astral and debaser:
I agree that the business will not go away permanently but as astral says, during a downturn it can get so tough that you think it has vanished.
I predict that real estate and home loans will continue to worsen for some time.
If it gets to $20 or below, I will be a "for sure" buyer.
Mr. Impulsive here has already started buying at $49.00 and then at $45.28. My plan is to buy more each time it drops a few bucks as long as earnings haven't gone negative. Until actual losses begin to eat into shareholders' equity, I think that the balance sheet will prop up the market cap. If it ever trades at $20 with shareholders' equity at it current level, I'll be buying seven or even eight more shares. They're good blankets in the cold LV winter even if they turn out to be bad investments.
EBAY now has an offering of an Enron stock certificate along with a copy of Enron's code of ethics and a memo from Ken Lay with one bid for $.99. I would bid on that sucker if I were you. That paper shredded would be much cheaper than eider down.
If you look at ITIC's 10-q for the first half of 2007, you will see that ITIC bought back almost 30,000 shares at a cost of almost $1,500,000 in that six month period.
This management is not nearly as bad as many others when it comes to helping themselves to the company's assets. They are not perfect though.
How hard can it be to run a business that competes in a virtual oligopoly? The top 5 firms control 90% of the title business. All ITIC has to do is let the big firms set profitable prices and maintain good relationships with North Carolina lawyers. If they had locked in some long-term debt at the recent low interest rates and didn't pay themselves so extravagantly the stock price would definitely be higher.
My eyes are so full of tears at seeing the bid way beyond my means ($6.20) that I can hardly type this. It is a shame that the certificate will hang on some wealthy collector's wood-paneled wall when there are cold people in the world without shredded-Enron-certificate-stuffed quilts.
Thanks for pointing that out. I didn't notice the buy backs (though they should be significantly larger). Your post made me do some research into executive compensation.
Executive compensation last year as a % of net income is horrible. 2.2 million in top executive comp 13 million in net income. 17% of net income is executive compensation. Compare this to Stewart Title with 2 million in executive compensation (for the top 3 execs) and 43 million in net income for a percentage of 4.6%. Their compensation appears to be egregious. Too bad the executives are also controlling shareholders.
Name and Principal Position
J. Allen Fine
Chief Executive Officer &
Chairman of the Board
James A. Fine, Jr.
President, Chief Financial Officer & Treasurer
W. Morris Fine
Executive Vice President & Secretary
going out in today's mail:
"Mr. James A. Fine, Jr.
President, Principal Financial Officer, and Principal Accounting Officer
Investors Title Company
121 North Columbia Street
Chapel Hill, North Carolina 27514
Dear Mr. Fine:
My wife, children, and I own a little over 3 shares of Investors Title in Schwab accounts. Since the share price is very near book value per share, I encourage you to have the company buy back its shares aggressively. As I am typing this, I have a partial fill on a buy limit ($38.10) order.
Can I add the 41 cents to my basis?
I know what you are saying. The current bid is now $78.00. And the Fed says there is no inflation! How can there be no inflation if worthless stock certificates go for $78?
I know Enron and Worldcom have all the cachet of being involved in truly great scandals but I guess that I will have to settle for the nuveau class of bankrupt companies relating to sub-prime mortgages. Maybe I can get some worthless stock certificates from American Home Mortgage for reasonable prices. I no that is down market but its the best I can do.