So if I'm reading correctly, TARP is now gone, and no more TARP payments? Should help earnings..still look mispriced by about at least 30%, may take a position here...as things starting to look stabilized at GFED and management seems to be following up on promises.
Sentiment: Strong Buy
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.
That's the real question, it takes time to fill out and bid for government contracts and margins are not always the greatest. The key is have they bid? It's all useless talk otherwise.
Dalton, I like the company, they are doing great things. I think one reason why it has traded back down here is that the market does not think that the mortgage side can continue to make the earnings it has. A lot of people are saying the spread has tightened on mortgage re-fi and the boom from the favorable spreads are over. If you put the cemetary side at break even and the life insurance side stabilized at $4mill earnings, thats .37EPS...the wildcard is the mortgage side...how long can they continue to make that type of money and in a stabilized environment what will the normal earnings from the mortgage side be?
I would love to load the boat, but I do not have any mathematical or logical answers to my questions, and I'm not good enough at this to dig deeper to run theory structures. But I think that's the concern.
Thanks for your comments, but it's stating to look really cheap at $7 as its trading at cash value...
Are you saying that their insurance side can't maintain the same earnings? $16.5 million was in mortgage earnings...but lets just say they break even on the cemetary and earn 4 million in life insurance...that's still .37EPS for the year alone. Then you are saying that the mortgage side has no value? they can't even earn $3-$4million in a stabilized environment?
also I don't think it's just refi stuff only..." To that end, we believe that our percentage of purchase related transactions is approximately 57%, which puts us in the top decile with regards to our peer groups and indicates a more stable origination platform. Our percentage of business now related to retail stands at 70% with 30% wholesale related. Despite the industry wide volume decrease in 2012, we believe we gained market share during the year. While there remains considerable uncertainty in the mortgage and housing markets, we believe our results show positive adaptation to circumstances and significant accomplishment. "
Also, Our acquisition strategy and internal growth has resulted in a better than 10% growth in insurance related assets that need to be deployed in appropriate income producing investments. At year end, we had over $40,000,000 in cash or equivalents. As those investments are achieved, profitability should improve.
So the stock is trading below book and still has a bright future even without exorbitant mortgage income as long as it can maintain some decent earnings. It's really tempting at $7, I just don't want to miss something....
Sorry to be more specific:
As of March 17, 2011, there were 21,119,488 shares of our common stock issued and outstanding.
As of March 20, 2013, there were 41,186,596 shares of our common stock outstanding.
However, as of November 14, 2011, 41,186,596 shares of the Company’s common stock, $0.001 par value per share, were issued and outstanding. Therefore, it is encouraging to see that O/S has stayed flat since November 2011, so maybe the dilution was a one time thing. If so this could be very positive as the company has very attractive funding mix with government grants and low cost government long term debt.
The question is whether NTS has finished increasing the O/S...as the company itself is making market penetration and is running a solid company...but going from 24 to 41mill O/S in a year is not good for shareholder value. Let's hope it stops there...bought some today, volume usually preceeds price.
Anyone here look at SNFCA? Look at their Refi business did for 2012, 16.5 million in earnings there...Sam do you think the earnings are sustainable? They did $1.65 EPS for 2012 and trading less than $8. Give me your thoughts.
It appears that the market does not believe in SNFCA story in terms of it having sustainable earnings. I was a long of SNFCA who recently sold and may buy back, but I dont know why the stock isn't holding gains. Looking at the numbers it appears that the insurance and cemetery services provide about .41 EPS for 2012. Mortgage refis are doing great but the concern is when interest rates start to rise, but I thought the fed backstopped it from increasing too much until at least 2015? Is it just refis on the mortgage segment of the company or is it tied to more type of mortgage opportunities that will be sustainable in any type of market? Losing 2million in mortgage segment versus gaining 16.5 million in 2012 is a huge difference, what did they do differently, that is the key to look into. If the mortgage earnings go to 3-4 million in the future that will put EPS at about .80, so still at this price a fair value. Let me know your thoughts?
It's amazing that there are so little posters on this board, I see this going between $25-$35 in the next 6 months, we will see