Despite good reports from retail industry driven by holiday shopping last Black Friday, the mortgage, finance and housing sectors continued to suffer in Wall Street. When will they recover? Time to pick up some bargains?
Freddie Mac (FRE, Financial): Down 56% Since Charles Brandes Bought In the Third Quarter
Freddie Mac, a government-backed mortgage lender, has seen its shares tumble more than 50% in less than a week. FRE reported a decrease in mortgage rates as a result of fed rate cut to 4.5%. The 30-year-fixed rate dropped to 6.24%, 15-year to 5.90%, and 5-year ARM to 5.89%. Last week, FRE shares fell 7.4% from $37.50 to $24.50 after FRE reported a third quarter loss of $2. Billion. Due to rising defaults, Freddie Mac and Fannie Mae had become the main buyers for mortgages. Analysts predict if the earnings of Freddie and Fannie continue to drop, they may cut back from buying new loans. Mid-November, FRE sold $5.5 billion in bills, which are due in 2008. Currently, FRE is doing their investigations on faulty appraisals with WaMu loans.
Charles Brandes added to his holdings in Mortgage Finance Company Freddie Mac to 450,429 shares at $55.23 and $63.16 per share. Guru Arnold Schneider and Richard Pzena also increased their FRE stock by 20.91% and 10.61%. Guru David Dreman kept his 12,954,210 shares unchanged; Dreman holdings account for 4.02% of the $19.55 billion portfolio of Dreman Value Management. Four other gurus kept their positions the same: Chuck Akre, Wallace Weitz, HOTCHKIS & WILEY, and NWQ Managers.
Freddie Mac has a market cap of $15.51 billion; its shares were traded at around $26.47 with P/S ratio of 8.18. The dividend yield of Freddie Mac stocks is 7.6%.
Washington Mutual Inc. (WM, Financial): Down 51% Since Charles Brandes Bought In the Third Quarter
NY Attorney General Andrew Cuomo ordered Freddie Mac and Fannie Mae to investigate the WaMu mortgages closely for inflated appraisals in early-November. Any affirmation of Cuomo’s suspicion of foul play would mean a huge blow to WaMu. Also, in the lawsuit American Express versus Visa, Washington Mutual Inc. will pay $38 million, in the $2.25 billion settlement. The charges lowered the third quarter profits by $24 million, or $0.03 a share.
Charles Brandes purchased 12,856,011 shares of Washington Mutual Inc. stock at $33.20 and $42.05. Arnold Schneider also bought 121,550 shares. HOTCHKIS & WILEY increased WM by 23.46% to 7,297,692 shares. Guru David Dreman kept his 12,476,152 shares of WM the same in his $19.55 billion portfolio of Dreman Value Management. Three other gurus, with large share volumes, kept their portfolio unchanged: Bill Nygren, Ronald Muhlenkamp, and Richard Pzena.
Directors Orin Smith and Michael K. Murphy bought 10,700 and 1,500 shares, respectively, priced at $28.03 to $35.85. Alfred R. Brooks, EVP & President of the Commercial Group, sold 3,000 shares at $43.82 in May.
Washington Mutual Inc. has a market cap of $14.58 billion; its shares were traded at around $18.21 with P/E ratio of 5.42 and P/S ratio of 1.23. The dividend yield of Washington Mutual Inc. stocks is 12.3%.
MGIC Investment Corp. (MTG, Financial): Down 48% Since Jean-Marie Eveillard Bought In the Third Quarter
All divisions of the mortgage or sub-prime mortgage business are suffering, including the companies that insure the mortgage business, like MTG. The growing delinquent loans forced the company to pay more claims than ever. The company announced that it will anticipate more claim payments through 2008. The current posted loss due to claims is $372.5 million, as of the third quarter.
Guru Jean-Marie Eveillard bought 50,000 shares between $28.02 and $57.37. Bill Nygren increased his shares by 81.91% to 828,800 shares as of 06/30. NWQ Managers currently owns 7,654,091.
Chairman and CEO, Director Curt S. Culver bought 50,000 shares at $19.77. Other insider buys were made between $17.16 to $20.47: President and COO Patrick Sinks bought 19,972 shares; Senior VP & Chief Info Officer Michael G. Meade bought 12,383 shares; Executive Vice President Lawrence J. Pierzchalski and Director Daniel P. Kearney each bought 10,000 shares; and lastly, Director Leslie M. Muma bought 3,000.
MGIC Investment Corp. has a market cap of $1.6 billion; its shares were traded at around $20.63 with P/S ratio of 1.02. The dividend yield of MGIC Investment Corp. stocks is 0.5%.
Freddie Mac (FRE, Financial): Down 56% Since Charles Brandes Bought In the Third Quarter
Freddie Mac, a government-backed mortgage lender, has seen its shares tumble more than 50% in less than a week. FRE reported a decrease in mortgage rates as a result of fed rate cut to 4.5%. The 30-year-fixed rate dropped to 6.24%, 15-year to 5.90%, and 5-year ARM to 5.89%. Last week, FRE shares fell 7.4% from $37.50 to $24.50 after FRE reported a third quarter loss of $2. Billion. Due to rising defaults, Freddie Mac and Fannie Mae had become the main buyers for mortgages. Analysts predict if the earnings of Freddie and Fannie continue to drop, they may cut back from buying new loans. Mid-November, FRE sold $5.5 billion in bills, which are due in 2008. Currently, FRE is doing their investigations on faulty appraisals with WaMu loans.
Charles Brandes added to his holdings in Mortgage Finance Company Freddie Mac to 450,429 shares at $55.23 and $63.16 per share. Guru Arnold Schneider and Richard Pzena also increased their FRE stock by 20.91% and 10.61%. Guru David Dreman kept his 12,954,210 shares unchanged; Dreman holdings account for 4.02% of the $19.55 billion portfolio of Dreman Value Management. Four other gurus kept their positions the same: Chuck Akre, Wallace Weitz, HOTCHKIS & WILEY, and NWQ Managers.
Freddie Mac has a market cap of $15.51 billion; its shares were traded at around $26.47 with P/S ratio of 8.18. The dividend yield of Freddie Mac stocks is 7.6%.
Washington Mutual Inc. (WM, Financial): Down 51% Since Charles Brandes Bought In the Third Quarter
NY Attorney General Andrew Cuomo ordered Freddie Mac and Fannie Mae to investigate the WaMu mortgages closely for inflated appraisals in early-November. Any affirmation of Cuomo’s suspicion of foul play would mean a huge blow to WaMu. Also, in the lawsuit American Express versus Visa, Washington Mutual Inc. will pay $38 million, in the $2.25 billion settlement. The charges lowered the third quarter profits by $24 million, or $0.03 a share.
Charles Brandes purchased 12,856,011 shares of Washington Mutual Inc. stock at $33.20 and $42.05. Arnold Schneider also bought 121,550 shares. HOTCHKIS & WILEY increased WM by 23.46% to 7,297,692 shares. Guru David Dreman kept his 12,476,152 shares of WM the same in his $19.55 billion portfolio of Dreman Value Management. Three other gurus, with large share volumes, kept their portfolio unchanged: Bill Nygren, Ronald Muhlenkamp, and Richard Pzena.
Directors Orin Smith and Michael K. Murphy bought 10,700 and 1,500 shares, respectively, priced at $28.03 to $35.85. Alfred R. Brooks, EVP & President of the Commercial Group, sold 3,000 shares at $43.82 in May.
Washington Mutual Inc. has a market cap of $14.58 billion; its shares were traded at around $18.21 with P/E ratio of 5.42 and P/S ratio of 1.23. The dividend yield of Washington Mutual Inc. stocks is 12.3%.
MGIC Investment Corp. (MTG, Financial): Down 48% Since Jean-Marie Eveillard Bought In the Third Quarter
All divisions of the mortgage or sub-prime mortgage business are suffering, including the companies that insure the mortgage business, like MTG. The growing delinquent loans forced the company to pay more claims than ever. The company announced that it will anticipate more claim payments through 2008. The current posted loss due to claims is $372.5 million, as of the third quarter.
Guru Jean-Marie Eveillard bought 50,000 shares between $28.02 and $57.37. Bill Nygren increased his shares by 81.91% to 828,800 shares as of 06/30. NWQ Managers currently owns 7,654,091.
Chairman and CEO, Director Curt S. Culver bought 50,000 shares at $19.77. Other insider buys were made between $17.16 to $20.47: President and COO Patrick Sinks bought 19,972 shares; Senior VP & Chief Info Officer Michael G. Meade bought 12,383 shares; Executive Vice President Lawrence J. Pierzchalski and Director Daniel P. Kearney each bought 10,000 shares; and lastly, Director Leslie M. Muma bought 3,000.
MGIC Investment Corp. has a market cap of $1.6 billion; its shares were traded at around $20.63 with P/S ratio of 1.02. The dividend yield of MGIC Investment Corp. stocks is 0.5%.
