CIT Group Inc had an interesting week. It started on September 29th when it rallied from a previous close of $1.67 to close at $2.20. A gain of 31%. Only to see that gain erased the following day, September 30th amid bankruptcy rumors. The close on September 30 was $1.21, a loss of nearly 50%. On top of all this, CIT experienced extremely high trading volume this week. On Friday, October 2, it was the most actively traded stocks on the New York Stock Exchange with 185 million shares trading.
As it turns out, the rumors were quickly proven to be true. On October 1, CIT group released a press release saying that it has launched a restructuring plan.
The press release can be found here. In summary, CIT is restructuring of its capital structure in order to enhance it’s capital levels. In doing so, CIT hopes to swap existing debt for new debt which is in betters terms for CIT. In doing so, CIT hopes to reduce their debt by $5.7 billion. If the Company does not achieve its restructuring objectives, it may decide to initiate a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code. The offer to convert existing debt expires on October 29. At that time, CIT will determine whether or not their objectives have been met.
There is a lot of risk going forward. Remember, the risk is to the investor and that risk is loss of capital. With this in mind, consider what the gurus at GuruFocus have been doing in regard to CIT Group Inc.
CIT Group Inc. is owned by 7 Gurus.
Given the risk associated with CIT Group Inc, we will look at the recent sellers first.
2 Gurus Reduced Positions in CIT. David Williams recently decreased his holding of CIT by 40% from the previous quarter. Third Avenue Management recently decreased its holding of CIT by 41% from the previous quarter.
4 Gurus Sold Out CIT. Martin Whitman sold out his holdings in the quarter that ended on 07/31/2009. Dodge & Cox , HOTCHKIS & WILEY and Richard Perry sold out there holdings in the quarter that ended on 06/30/2009.
1 Guru Increased Positions in CIT. David Dreman owns 55,445 shares as of 06/30/2009, an increase of 78.02% from the previous quarter. However, this position accounts for less than 0.01% of the $3.12 billion portfolio of Dreman Value Management.
4 Gurus Kept Positions in CIT Unchanged or Slightly Adjusted: Charles Brandes owns 23,919,838 shares as of 06/30/2009, which accounts for 0.28% of the $18.33 billion portfolio of Brandes Investment. Charles Brandes owns 3,100,000 shares as of 06/30/2009, which accounts for 0.04% of the $18.33 billion portfolio of Brandes Investment. Edward Lampert owns 15,406,937 shares as of 06/30/2009, which accounts for 0.34% of the $9.71 billion portfolio of ESL Investments. Martin Whitman owns 3,250,000 shares as of 04/30/2009, which accounts for 0.19% of the $4.7 billion portfolio of Third Avenue Value Fund.
In conclusion, in the most recent quarter, over half of the gurus tracked by GuruFocus, over half of them reduced or eliminated their holding in CIT. Data such as this can be a useful part of one's investing toolkit.
To browse over the CIT trading history of gurus tracked by GuruFocus, go here.
CIT Group Inc. is a leading commercial and consumer finance company provides clients with financing and leasing products and advisory services. Cit Group Inc. has a market cap of $458.74 million; its shares were traded at around $1.17 with and P/S ratio of 0.07. Cit Group Inc. had an annual average earning growth of 27.2% over the past 5 years.
As it turns out, the rumors were quickly proven to be true. On October 1, CIT group released a press release saying that it has launched a restructuring plan.
The press release can be found here. In summary, CIT is restructuring of its capital structure in order to enhance it’s capital levels. In doing so, CIT hopes to swap existing debt for new debt which is in betters terms for CIT. In doing so, CIT hopes to reduce their debt by $5.7 billion. If the Company does not achieve its restructuring objectives, it may decide to initiate a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code. The offer to convert existing debt expires on October 29. At that time, CIT will determine whether or not their objectives have been met.
There is a lot of risk going forward. Remember, the risk is to the investor and that risk is loss of capital. With this in mind, consider what the gurus at GuruFocus have been doing in regard to CIT Group Inc.
CIT Group Inc. is owned by 7 Gurus.
Given the risk associated with CIT Group Inc, we will look at the recent sellers first.
2 Gurus Reduced Positions in CIT. David Williams recently decreased his holding of CIT by 40% from the previous quarter. Third Avenue Management recently decreased its holding of CIT by 41% from the previous quarter.
4 Gurus Sold Out CIT. Martin Whitman sold out his holdings in the quarter that ended on 07/31/2009. Dodge & Cox , HOTCHKIS & WILEY and Richard Perry sold out there holdings in the quarter that ended on 06/30/2009.
1 Guru Increased Positions in CIT. David Dreman owns 55,445 shares as of 06/30/2009, an increase of 78.02% from the previous quarter. However, this position accounts for less than 0.01% of the $3.12 billion portfolio of Dreman Value Management.
4 Gurus Kept Positions in CIT Unchanged or Slightly Adjusted: Charles Brandes owns 23,919,838 shares as of 06/30/2009, which accounts for 0.28% of the $18.33 billion portfolio of Brandes Investment. Charles Brandes owns 3,100,000 shares as of 06/30/2009, which accounts for 0.04% of the $18.33 billion portfolio of Brandes Investment. Edward Lampert owns 15,406,937 shares as of 06/30/2009, which accounts for 0.34% of the $9.71 billion portfolio of ESL Investments. Martin Whitman owns 3,250,000 shares as of 04/30/2009, which accounts for 0.19% of the $4.7 billion portfolio of Third Avenue Value Fund.
In conclusion, in the most recent quarter, over half of the gurus tracked by GuruFocus, over half of them reduced or eliminated their holding in CIT. Data such as this can be a useful part of one's investing toolkit.
To browse over the CIT trading history of gurus tracked by GuruFocus, go here.
CIT Group Inc. is a leading commercial and consumer finance company provides clients with financing and leasing products and advisory services. Cit Group Inc. has a market cap of $458.74 million; its shares were traded at around $1.17 with and P/S ratio of 0.07. Cit Group Inc. had an annual average earning growth of 27.2% over the past 5 years.
