Isn't there a good legal basis for MBI initiating a suit to withdraw its insurance on Puerto Rican utility bonds? Don't the laws that the Puerto Rican government has passed completely change the risk profile of the insurance? Surely the insurance contract allows the insurer to withdraw its insurance when risk profile is change in bad faith?
What is the CUSIP for the bond that is due? If Tower defaults, where do those bondholders stand in the debt structure and how much of the reorganized entity would they end up owning?
By the way, Yahoo shows First Call earnings estimates for JOEZ for 2015 falling from .08 a few weeks ago to .03 currently. Do you think those estimates incorporate another year of one-time expenses? I would like to reconcile to your 12 cent estimate for 2015.
Can anyone give any valuation metric for JOEZ that would justify the share price north of $1.50? They have almost no forward earnings, so they trade at high forward PE currently. It looks like this holds the current share price based on book value.
What are comparable valuations for other fashion resellers that lack any positive earnings?
What percentage of SNFCA's sales and net earnings are attributable to each of its business segments, including mortgage origination?
What was last quarter's earnings in the mortgage origination business, and did management give guidance on when that segment might hit bottom?
That's simply gambling, betting on interest rates like you would bet on a commodity.
What made MSRs interesting in early 2013 was that you could calculate very high IRRs buying them at market rates without making any upward assumptions about future interest rates. That's no longer the case.
What value would the DTA ever have to IMH? Won't they be able to use the net operating losses to offset future earnings? They clearly won't make enough from earnings to even put a dent in the $489 NOL. Therefore the DTA - which does eventually expire worthless - is effectively a sunk asset that will never realize any value?
Isn't it a little late in the cycle to just start to realize the value of MSRs now? MSRs were a big story early 2013 because they were unwanted and hugely undervalued. Now you have four or five entities that are focused on buying them from banks, and that in turn shot up the prices that everyone pays for those MSRs.
My point here: where exactly is IMH going to buy any quantity of "cheap" MSRs? The asset class is getting fairly valued now.
They are taking huge losses on the mortgage origination business not breakeven. There isn't a risk of running out of cash, but remember that mortgage origination is a commodity business that normally gets a two to three times earnings valuation. It looks to me like it will be two years to right-size that business back to profitability, and the earnings will be far lower than during the refinance boom. Multiply those future projected earnings times three. It's not a great upside.
According this bond default calculator, if you leave price blank, enter risk of default at 1% (very low estimate) and enter 2 payments per year and 120 payments remaining and treasury rate at 5% (projecting forward) it calculates the price at around $17.
So this tends to confirm your thesis.
The MSRs are a good business, but the mortgage origination business is in a freefall and taking on signficant losses. This stock is dead money until that situation is under control.
No, a fear of bankruptcy would hit the common shares before the preferred. It looks more like the market anticipates more capital being raised. Is that something they have discussed?
The problem is their market is collapsing. Declining sales means likely negative or no income for a while. How do they fund any dramatic R&D? What products turn around the sales decline?
It's not so much an imminent bankruptcy as it is a long-term malaise.
Delisting should crash their shares and you might trade around that event, but I don't see any good fundamentals here for a sustained recovery to a fair valuation.
If they reserved in full I don't think the stock would go up even 25 cents. The non-cash losses associated with the real estate trusts are simply mark to market accounting on some residual equity investments IMH has in those trusts. Why do people focus on these things? They are a total non issue.
What drives this company's value is the operating earnings from real estate services and mortgage refinance and originations. The last earnings report was a bloody catastrophe. That's the one and only part of the income statement IMH needs to fix.