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Security National Financial Corp. Message Board

  • dalton880 dalton880 Apr 22, 2013 2:34 PM Flag

    Just bought more at $6.65 today,

    and will continue to average down. Fundamentals say SNFCA is selling at a 3.6 PE going forward fully taxed and diluted until news comes out that proves to the contrary. I have no idea why the stock went to $15.50 several weeks ago, and no idea why it's at $6.70 now, but what I do know is this company looks like it can easily make $1.80+ in fully diluted and fully taxed EPS for 2013.

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    • Dalton, it's not that hard to figure out.....the market clearly is showing that they are non-believers in the continued success of the mortgage division. Apparently, correct me if I'm wrong, the mortgage division is making these kind of profits on a huge jump in re-fi's and great spread. I've been told that the spread should be getting smaller and the re-fi boom will not last. The question I have asked, which I still do not have an answer for is what creates the huge discrepancy between the 2011 mortgage division and the 2012? I have yet to figure this out or get in an in depth answer as to how their business plan changed in that division. In 2011, the division was unprofitable. Who is to say that cannot happen again? If the mortgage division is out of the mix or barely makes money, then you have earnings closer to .30-.45 EPS for the year. Not sure that would justify more than a 15 P/E for a $4.50-$7.50sh price range.

      For the record, I currently own no shares, and I am more bullish on this stock than anything. I think it should have good earnings this quarter and will probably buy some soon, but I can understand why this stock has been so volatile. Because no one seems to know what the mortgage side will provide in a "stabilized" environment.

      • 1 Reply to workallday997
      • workallday, you're not seeing the whole picture. Yes refis are slowing, but SNFCA has been and still is trending away from refis, and into mortgages from new purchases. That business should continue to grow with the housing comeback, and as of the Dec qtr, SNFCA had 57% of its mortgage originations from new purchases, and trending higher. Bank of America for example had 90% of its mortgage originations from refis vs 10% from new purchases in the Mar qtr.

        In addition to this, SNFCA has been taking market share, and growing their overall mortgage originations hugely, mainly from new purchases. I see no slowdown to the pre 2012 levels you sighted, for years, if ever. Bottom line is, the stock has been priced as if mortgage earnings going forward will drop dramatically. Of course this is total speculation, as SNFCA has been increasing earnings from their mortgage division for 8 straight qtrs, while the banks have been slowing now for the last two qtrs sequentially. I believe this shows SNFCA is growing by both taking market share, and having much higher % of originations from new purchases vs refis, so as to grow with the housing revival, which is much more dependable than refis.

    • Nice buy Dalton, I was in there as well, the more I looked around the more this looked the most compelling to me. The R/S is diverging as well which shows this selloff is weaker than the previous, that along with several other indicators have this as a screaming buy. I bought this last May, albeit before it got any attention, and rode it up to what I thought was fairly valued in the 13.50 area. The momentum overshot to the upside with those buyers chasing it at the end to 15.00+. Now the selling has overshot to the down side, at current earnings assuming no growth it would be fairly valued at 13.50 imo. So with fair value at a double from here, could not find anything else today that I felt as good about as I do with this. Again, I think you made a very good buy here.

      Sentiment: Strong Buy

    • and it will probably be trading at $4 then lol baffling i tell ya

6.85+0.01(+0.15%)2:57 PMEDT