Attenzione a Barron's per CCR


  By: GZ on Lunedì 25 Marzo 2002 19:47

abbonarsi a ------------------------------------------------------- BARRON'S: Homey Value: Countrywide Credit's Shares Look Like A Bargain, Especial By Andrew Bary Angelo Mozilo, the longtime chief executive of Countrywide Credit Industries, spends lots of time trying to convince Wall Street that his firm -- the nation's fourth-largest mortgage originator -- is a growth company. He points out that the Calabasas, Calif., company's profits have risen at an impressive 17% annual rate in the past decade, and that Countrywide aims to generate 15%-20% profit growth in each of the next several years. But his efforts, so far, have not been successful. Countrywide's stock, at 43, is no higher than it stood four years ago, despite appreciable growth in earnings and book value. The investment community continues to view Countrywide as an interest-rate proxy. With rates now rising, the fear is that the torrid pace of mortgage-refinancing activity will slow and competition will intensify among lenders, crimping Countrywide's earnings. That view, however, may be too simplistic. Countrywide now has a more diversified revenue stream than it did just three years ago, meaning that the company's profits may not be as vulnerable to higher rates as is widely feared. "We think Countrywide offers two ways to win," says Bennett Lindenbaum, a principal at Basswood Partners, a New York investment firm. "It's cheap on its fundamentals and it's a great acquisition candidate." Countrywide is worth 55-60 a share based on earnings and book value, and would command at least 60 in a takeover, Lindenbaum says. He points out that Countrywide trades for under nine times projected 2002 profits of $4.90 a share and for a modest 1.3 times yearend 2001 book value of $33 a share. Jonathan Gray, analyst at Sanford Bernstein, also believes the stock is worth over 60. "Countrywide trades for 40% of the market multiple. It ought to trade for 60%," Gray says. The Standard & Poor's 500 now trades at around 23 times projected 2002 operating profits. Countrywide, it's worth noting, does share a low valuation with other mortgage-related stocks. Washington Mutual, the nation's largest thrift, trades at 33, just nine times estimated 2002 profits. Fannie Mae, at 80, and Freddie Mac, at 64, trade for 13 times forecast 2002 earnings, despite their long record of double-digit annual profit growth. As the country's largest independent mortgage banker, Countrywide has considerable scarcity value -- and a very digestible current market value of $5.4 billion. Potential acquirers include Citigroup, which has a limited presence in the U.S. mortgage market; Wells Fargo; U.S. Bancorp; and several European banks, including the U.K.'s Lloyds Group, which has Big-Board-listed shares that it can use for U.S. acquisitions. Last year, Countrywide trailed Wells Fargo, J.P. Morgan Chase and WaMu in originations and the size of its servicing portfolio. Countrywide earned $3.89 a share in 2001, up from $3.14 during its fiscal year ended in February 2001. The 2001 results are distorted because the fiscal year included just the final 10 months of 2001: Countrywide moved to a December fiscal year in 2001, resulting in a truncated reporting period last year. If Countrywide's 2001 earnings were annualized, they would total about $4.60. Back in 1992, Countrywide earned just 81 cents a share. Countrywide has been subject of takeover rumors for several years, but no deal has materialized amid talk that the 63-year-old Mozilo, who co-founded the company in 1968, has wanted too high a price. In an interview last week, the Bronx-born CEO indicated no eagerness to sell, while acknowledging his responsibility to "realize shareholder value." "We once were No. 1 in the industry, and we'll look at the alternatives available to get back to No. 1 and dominate the industry," he told Barron's. Lindenbaum points out that Countrywide's return on equity, now around 17%, would be higher under a bank umbrella because Countrywide now must maintain significantly higher capital than banks do for their mortgage businesses. Countrywide's fans say that while the company's mortgage originations likely will fall in 2002 from the record $138 billion in the 12 months ended February 2002, its profits still could increase because of the cash thrown off by its giant servicing portfolio ($348 billion at last count), as well as diversification initiatives, including mortgage trading, insurance and banking. These non-mortgage activities accounted for 22% of Countrywide's profits in 2002 and an ambitious Mozilo is aiming for a 50% contribution from them by 2006. While Countrywide is perceived as cyclical, there's an inherent balance to its two main mortgage businesses: loan originations and servicing. Last year, originations were very profitable, given strong levels of home purchases and record refinancing. But the servicing portfolio suffered in a low-rate environment. Countrywide gets a fee of 0.40% of the typical loan balance for servicing the mortgage, which involves collecting monthly payments and distributing the principal and interest to the owners of the mortgages and taxes to local authorities. Countrywide generally doesn't hold mortgages on its balance sheet, as thrifts typically do. When rates fall, servicing portfolios fall in value because homeowners refinance mortgages, terminating loans that Countrywide services, depriving it of fees on part of its portfolio. When rates rise, loan originations slow, hurting profits, but mortgage-servicing values increase because of low refinancing activity. With long-term mortgage rates up to 7% from 6.5% in late 2001, refinancing is expected to be sharply below the $1.2 trillion last year. Originations for purchases are seen totaling $800 billion, in line with 2001. Lindenbaum believes Countrywide's servicing portfolio, carried as a $6 billion asset on its balance sheet, is conservatively valued at 1.8% of the yearend 2002 loan balance -- below the industry convention of about 2%. Assign a higher value to the servicing and Countrywide's book value would be close to $40 a share, versus the reported $33 a share. Lindenbaum sees stated book value rising toward $40 a share anyway in the next year, based on Countrywide's expected profits. This means that investors effectively are valuing the company at little more than its projected 2003 liquidation value -- with no value attributed to the profits from its huge origination business. There are some knocks against Countrywide, including the difficulty in determining the precise source of its profits. Mozilo calls this a "legitimate criticism," but says that the company's soon-to-be-released 10-K for 2001 will provide additional disclosure that should allow investors to understand its earnings better. Countrywide does have some exposure to the so-called subprime mortgage market of credit-impaired borrowers. But Mozilo downplays such concerns, saying the subprime sector represents only 4% of the company's business. It's possible that Countrywide won't earn $4.90 a share this year. But the market doesn't appear to be anticipating anything close to that, let alone the 15%-20% growth annually that Mozilo sees thereafter. If Countrywide can hit that earnings mark, and therefore show that its profits aren't rate-sensitive, its stock could easily top 50. And the stock could hit 60 or 65 -- if one of many potential buyers convinces Mozilo that it's finally time to sell the franchise. Modificato da - gzibordi on 3/25/2002 19:5:45


  By: alsicl on Lunedì 25 Marzo 2002 18:24

vero , infatti e' sceso a +2 perche' ho detto ai miei fans di vendere......... una informazione si puo' leggere on line e senza abbonamento? PS acc. !! ho avuto la stessa idea di barron's wow!!!! al


  By: GZ on Lunedì 25 Marzo 2002 18:15

beh vuole dire che lei ha le stesse idee di Barron's il settimanale di borsa più importante del mondo che a differenza di Milano Finanza non menziona 67 titoli come comprabili ogni settimana, ma solo 3 o 4 e CCR è quello che raccomandava dicendo che è candidato per acquisizione e vale 60$ dico solo che l'effetto di stamattina èla copertina di Barron's (oltre alla gente del forum che la segue e spinge il titolo ovviamente) ma è molto interessante come storia se la legge


  By: alsicl on Lunedì 25 Marzo 2002 18:08

accidenti..... non leggo barron's e sono stato un po' spiazzato. per coerenza avevo messo l'ordine ed e' stato eseguito a 44.9. come si fa ad abbonarsi a barron's se non si e' residenti in usa ?? grazie alberto siclari al

Attenzione a Barron's per CCR - gzibordi  

  By: GZ on Lunedì 25 Marzo 2002 17:56

eccomi qua a segnalare un altro titolo usa. Ora : titolo CCR countrywide credit industries. titolo finanziariosi occupa di crediti prestiti e assicurazioni. Ottime valutazioni fondamentali ------------------------- attenzione che era sulla copertina di Barron' settimanale del weekend per questo ha aperto in gap ed è pericoloso