Nuckols also unloaded American Home Mortgage Investment (nyse: AHM - news - people ), which is not subprime, but he fears that it could get painted with the same brush.
Lehman follows AHM. Watch, Lehman will wait until they feel it has hit the low, then they will update their recommendation of 1-overweight. Lehman says there is skepticism regarding AHMs performance, but expects the stock to rise when the skepticism is gone. The question is - when will the skepticism go away. The 13% yield on the dividend will help over time.
AHM is not subprime but they need to do a better job of talking to the media and analysts.
I plan to hang in there and benefit from the good yield.
Check the yield again, it's higher than 13 percent. Also, lehman Brothers said recently "AHM should significantly outperform the market as soon as market skepticism subsides and until that happens investors should be rewarded for their patience with a 14%+ cash return" They left their target at $45. In other words they think this is oversold. Most of the stocks they cover trade much closer to their target prices.
I see there's over 12 million shares held short as of 2/15. That's bullish as well. What if they beat estimates yet again when they next report ? The company's guidance already anticipates a highly stressed credit environment.
Hi..Just saw a notice from the AP newswire which basically apologizes for its Thurs. wire which lumped AHM in with all the other sub-prime lenders... Seems to me that we, therefore should be seeing some recovery come Monday...Eegle