Posts for Ticker ‘ACA’

Worthless Ratings Agencies (MHP, MCO, ABK, ACA, MBI, DHI, BX, SCA)

We have been pretty critical of the ratings agencies not being on their toes and calling on things far too late.  In fact, I have been an anti-fan of theirs all the way back to Enron.  Today is another prime example of ratings agencies being late.  They might even be analyzing a 2000 Gore-Bush vote recount at this point.  McGraw Hill’s (NYSE:MHP) S&P and Moody’s (NYSE:MCO) sure seem to have perfected worthless ‘objective’ coverage.

ACA Capital (OTC:ACAH) was downgraded today to junk status under the "BBB" rating at S&P.  Congratulations. Like that was a difficult one to see coming.  This one is up big today on hopes (rumors) that the brokerage firms may band together to save it, although they would likely be doing this to save their own exposure from it failing more than seeing this one as a good investment.

D.R.Horton (NYSE: DHI) was downgraded by Moody’s to junk status: Ba1 is the new rating after having been at Baa3, the lowest investment grade out there.  There shouldn’t be a single homebuilder in the U.S. with an investment grade rating and there shouldn’t have been since 2006.  If you tried selling a house in 2006 in a non-hot part of the country you’d know why this is so.  The truth is that homebuilders are now just land banks and using the balance sheets for guidance is pure wizardry.  We have asked "Which Homebuilder Goes to Zero First?" for good reason.

S&P took its outlook on AMBAC (NYSE: ABK) and MBIA (NYSE:MBI) to negative from stable.  Where has S&P been?  These companies have had known exposure to this mess for weeks now. At least AMBAC said it could get its rating stabilized.  Security Capital Assurance’s (NYSE:SCA) XL Capital Assurance unit is also on negative credit watch, so investors might as well get ready for that "AAA" rating to go away too.  Blackstone Group (NYSE:BX) has a unit called Financial Guaranty Insurance Co. that the community has called "FGIC" (or pronounced ‘Fij-ic’) forever.  S&P has it under review as well.

Moody’s (NYSE: MCO) just maintained some of its own "Aaa" ratings on Monday, so there is a turf war. If you can recall a housing executive saying the housing market "was going to suck" a while back, it might ring a bell.  We don’t have to say that the ratings agencies suck, because they already know that they do.  Maybe the conspiracy theorists are right.  Maybe if these ratings agencies were truly objective (and actually analyzed these in the manner that we all were counting on them to) that would have never allowed much to really happen in the financial markets.

Most of these stocks have traded lower on the day, but they all have recovered far off lows and some are actually up on the day.  If you take a look at what we’ve said here you’ll know we have noted how their business models in covering debt issues are full of conflicts of interest top to bottom.  No wonder.

Jon C. Ogg
December 19, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the SPECIAL SITUATION newsletter and he does not own securities in the companies he covers.

Posted on: December 19, 2007 – 3:38 pm in Analyst Calls, , , , , , , ,

ACA’s Being Demoted To Pink Sheets? (ACA, BSC)

ACA Capital Holdings, Inc. (NYSE: ACA) has been notified by the NYSE that it had fallen outside of the NYSE’s continued listing standards and is now "below criteria" and will have a ".BC"status on teh NYSE tape.  This is due to its total market capitalization being less than $75 million over a consecutive 30 trading-day period and its stockholders’ equity is less than $75 million.  ACA Capital had 45 days from receipt of the notice to respond with a business plan that demonstrates its ability to achieve compliance with the continued listing standards.  But that is all for naught.

ACA Capital said in its press release that it does not believe that it can take steps which will permit it to satisfy the financial continued listing criteria of the NYSE within the 18 month cure period.  ACA Capital DOES NOT intend to submit a plan to the NYSE.  ACA Capital has been informed by the NYSE that it will commence suspension and delisting procedures as a result of the failure to submit a plan.

Shares of ACA have barely been public for a year since its IPO.  Bear Stearns (NYSE:BSC) owned a huge slug of this company.  Shares closed down $0.02 at $0.68 today, and the 52-week trading range is $0.22 to $16.55. 

ACA Capital Holdings provides financial guaranty insurance products to participants in the global credit derivative, structured finance capital, and municipal finance capital markets.  It should say "it did provide."   If this one disappears completely it is possible that it will have another round of ripples with other investment banks because it was considered one of the backstops keeping the firms out of the soup.  Whether or not that is true today compared to one-month ago is a "pending matter."

Pink Sheets here you come. 

Jon C. Ogg
December 14, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: December 14, 2007 – 5:01 am in Financial Stocks, ,

The 52-Week Low Club

Aca Capital (ACA) S&P cuts rating after big loss. Drops to $1.60 from 52-week high of $16.55.

Quebecor World (IQW) Refinances company, brings on new debt. Falls to $4.12 from 52-week high of $14.79.

Assisted Living Concepts (ALC) What a drag its is getting old. Poor earnings. Down to $6.95 from 52-week high of $13.18.

SPACEHAB Incorporated (SPAB) Big Q1 loss. Falls to $.11 from 52-week high of $1.23.

Inphonic Inc (INPC) A little delisting problem with Nasdaq. Down to $.03 from 52-week high of $14.49.

FOCUS Enhancements (FCSE) Weak Q3 results. Drops to $.61 from 52-week high of $1.83.

Douglas A. McIntyre

Get a Free Trail to the 24/7 Wall St. "Ten Stocks Under $10" weekly newsletter and follow our analysis of hundreds of low priced stock each year.

Posted on: November 13, 2007 – 4:00 pm in HI/LOW, , , , , ,

ACA Capital, A Disastrous Post-IPO Year (ACA)

Is it normal for a company to respond to a "negative credit watch" call from a ratings agency, only to see its stock fall another 31%?  Enter ACA Capital Holdings, Inc. (NYSE:ACA)….

Last Friday after the market close, ACA responded to a ratings action by Standard & Poor’s after it placed the ‘A’ financial strength rating of ACA Financial Guaranty Corp. on CreditWatch with negative implications, based on a variety of factors.  The Company also reported strong Public Finance and Structured Credit production in the third quarter of 2007 and results for the nine months of 2007 were in excess of the posted full year results for 2006.  ACA said it intends to have further discussions with S&P to better understand its actions and the remedies that may be available to respond to the negative credit watch position.

24/7 Wall St. has warned investors of the potential impending exposure to severe problems inside ACA.   ACA Capital is a holding company that provides asset management services and credit protection products to participants in the global credit derivatives markets, structured finance capital markets and municipal finance capital markets.  That sounds a hell of a business to be in right now, the hell where the fire and torture is taking place anyway.

ACA came public in late 2006, but as soon as the credit crunch came in summer of 2007 its shares went from good, to flat, to down, to way down, to somewhat stable, and now down even far worse.  Another few days like this and the stock will get to go trade on the beloved pink sheets.  At $2.06, shares are at a new low.  The last year’s trading range is $2.48 to $16.55. 

Jon C. Ogg
November 12, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Posted on: November 12, 2007 – 1:45 pm in Financial Stocks,

Pre-Market Analyst Calls (November 5, 2007)

ACA cut to Underperform at Credit Suisse.
ACW raised to Neutral at UBS.
AMSC started as Buy at Jefferies.
ATPG cut to Underperform at RBC.
BSC cut to Equal Weight at Lehman.
BSY cut to Neutral at Merrill Lynch.
CNP raised to Buy at Jefferies.
CPT cut to Neutral at B of A.
DRE cut to Neutral at UBS.
FSLR started as Sector Perform at CIBC.
GLF raised to Buy at Jefferies.
GNA raised to Outperform at CIBC.
HD cut to Hold at Deutsche Bank.
LLY cut to Underweight at HSBC.
LOW cut to Hold at Deutsche Bank.
MER cut to Equal Weight at Lehman.
NLC raised to Neutral at UBS.
PDGI raised to BUy at Jefferies.
PVTB raised to Overweight at JPMorgan.
TUES raised to Outperform at Piper Jaffray.
WCG raised to Buy at Jefferies.
WST raised to Buy at UBS.

Jon C. Ogg
November 5, 2007

Posted on: November 5, 2007 – 7:46 am in Analyst Calls, , , , , , , , , , , , , , , , , , , , ,

Pre-Market Stock News (August 3, 2007)

(ACA) ACA Capital said subprime mortgage exposure does not threaten stability of its unit ratings.
(AHM) American Home Mortgage is closing most operations and laying off most of its 7,400 workers Fridaydown to about 750 workers.
(BBND) BigBand Networks traded down close to 20% after lowering estimates after earnings.
(BUCY) Bucyrus $0.80 EPS vs $0.76 est.
(CME) CME traded higher after Cramer said it was a cheap growth stock and one to play the volatility.
(FTEK) Fuel-Tech won pollution control orders for almost $3.7 million.
(GRMN) Garmin is buying a distributor in Italy.
(HERO) Hercules Offshore $0.74 EPS vs $0.70 est.
(ISLE) Isle of Capri $0.17 EPS vs $0.04 est; unsure if comparable.
(NTAP) lowered guidance; shares trading down close to 20%.
(PCS) MetroPCS $0.17 EPS vs $0.14 est.
(PG) P&G $0.67 EPS vs $0.66 est.
(QTWW) Quantun Fuel Systems said a subsidiary entered into agreement with Ford for producing the Ford F-150 special edition truck.
(THI) Tim Horton $0.36 EPS vs $0.36 est.
(TM) Toyota Motors posted record profits and strong hybrid sales; shares indicated up 1%.
(TOPT) Top Tankers $0.15 EPS bvs $0.04 est.
(TTWO) Take-Two lowered guidance after delaying ist Grand Theft Auto 4 video game.

Jon C. Ogg
August 3, 2007

Posted on: August 3, 2007 – 7:11 am in Pre-Market Activity, , , , , , , , , , , , , , , , ,

New 52-Week Lows (July 20, 2007)

STOCK TICKERS: ABK, ACA, BZH, LEN, DHI, RYL, CC, BX, FIG, FINL, HGSI, HSY, HW, JNY, NLS, REDE, TRMP, UBET, TZOO, WB

The DJIA may have hit 14,000 earlier.  A pullback here, some bad news there, and all of a sudden there are still many little piggies being sold off.  Here are some of the main stocks hitting 52-weeks lows today, and it is even an edited-down list:

AMBAC (ABK) $80.05
Whoops, insuring and guaranteeing debt.

ACA Capital (ACA) $6.40
Yep, still no word out of the company yet.  Trading and guaranteeing CDO’s and derivates isn’t what it was cracked up to be, and we still don’t know their real situation.

Beazer Homes (BZH), Lennar (LEN) DR Horton (DHI), Ryland (RYL)
One of its comps calling for crummy to 2009…ouch.

Circuit City (CC) $13.63
You knew this one wasn’t bottomed out yet.

Blackstone (BX) $25.95
Schwarzman isn’t responsible for this added drop, but he’ll do for the blame.

Fortress Inv. Group (FIG) $22.28
This hedge fund, boy…are they in private equity and CDO’s?  Not an intraday low, but its lowest close.

Finish Line (FINL) $7.88
Glad I removed it from the BAIT SHOP of buyout candidates when I did, this one must have 10 piggies in each of their shoes.

Human Genome Sciences (HGSI) $8.61
Maybe genomics is such a 1990’s term.

Hershey (HSY) $47.84
This one was very overvalued for something you eat, so it squirts.

Headwaters (HW) $16.43

Jones Appareal (JNY) $26.62
Weren’t these guys supposed to sell out?

Nautilus (NLS) $9.14
When will a growth exercise and fitness company that warned be touted as a value stock?

Redenvelope (REDE) $5.05
Still don’t know anyone who has used this online e-tailer.

Trump Entertainment (TRMP) $9.50
The Donald’s casino operator can’t find a bottom without reaching under his back.

YouBet.com (UBET) $2.04
Bet this one isn’t done?

Travelzoo (TZOO) $23.00, prior intraday low was $23.16; high was $40.00+.
Online travel carnage continues….maybe France, Hong Kong, and Japan aren’t worth it.

Wachovia (WB) $49.98 close..prior 52-week low was $50.32.
Banks, they need someone to "Watch-ova-ya"

Jon C. Ogg
July 20, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: July 20, 2007 – 3:38 pm in HI/LOW, , , , , , , , , , , , , , , , , , , ,

ACA Capital: Deep Value Stock OR Serious Viability Risk (ACA, BSC)

ACA Capital Holdings, Inc. (NYSE:ACA) is a company in trouble.  A stock screen yields the results that the company trades significantly under book value, but your name would have to be Dr. Pangloss to believe that this was anywhere close to the real balance sheet as of today.  As of March 31, 2007, the company’s net tangible book value was listed as $424.6 million.  Today’s market cap was listed as $240.9 million.  Shares closed down another 22% today at a new post-IPO low of $6.59 on more than 3.1 million shares.

Since the company listed nothing worth noting as goodwill on its balance sheet, you’d realize that there is ‘ill-will’ on the books.  This company has been public only since the end of 2006 and the last month for shareholders could only be described as fugly.

When you run stock screens, it is always interesting when a company stock shows up as 0.6-times stated book value.  But if the market is trading at all-time highs, you have to know better and you have to know that something may be wrong.  Because of the business segment this is in (financial guaranty insurance in credit derivatives, ouch), it is almost certainly safe to assume that the old book value is nowhere close to the situation today.  On June 29, the company withdrew its registration statement over a proposed 3.9+ million share offering from selling stockholders.

ACA Capital is a holding company that provides asset management services and credit protection products to participants in the global credit derivatives markets, structured finance capital markets and municipal finance capital markets.  If that isn’t the crummiest sector to be in right now, tell these guys to ask Bear Stearns (NYSE:BSC).  Bear Stearns is also a significant shareholder in the company.

The NYSE has a note that the company does not comment on unusual activity and my telephone call to Hyde Park Financial Communications was responded to with the answer that as of now that is all that will be coming out of the company.

With the obvious implosions in the CDO markets and in other credit derivatives, it is hard to know  what the real situation is.  There is either a significant risk to the company’s viability, or at some point there is significant value.  But if the company is keeping the media room dark then any investment into this is no different than flying blind.  This will have to be left to the speculators because from the eyes of a value-oriented focus this one is impossible to evaluate with data that is more than 90-days old.

Jon C. Ogg
July 16, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: July 16, 2007 – 4:16 pm in Financial Stocks, ,

52-Week Lows (July 13, 2007) (ACA, AVAV, IDIX, KERX, NKTR, REDE, STAA, TRMP, UBET, WON)

Stock Tickers: ACA, AVAV, IDIX, KERX, NKTR, REDE, STAA, TRMP, UBET, WON

The DJIA & S&P 500 Index may have put in new highs today, but as you know there are always a dingy group of little piggies putting in new 52-week lows.  Some companies are poorly run, and some are just victim of circumstance.  Maybe they can just all blame Friday the 13th.  Not all of these are definitely CLOSING on 52-week lows but some deserved the honorable mention.  Here are today’s little piggies:

(ACA) ACA CAPITAL HOLDINGS… Giving it up again, down 50% from Highs.  ACA provides financial guaranty insurance products to participants in the global credit derivative, structured finance capital, and municipal finance capital markets.  You think subprime or CDO blow-ups snuck into their pocketbook?

(AVAV) AEROVIRONMENT INC… Shares traded down another 2.4% and traded down into the ‘teens’ for the first time since its IPO in January.  No one realized that its flying re-con plane was needed to find stock buyers rather than enemy soldiers over the horizon.

(IDIX) IDENIX PHARMACEUTICALS… Whoops, FDA halts Hep-C trials. Ouch!

(KERX)    KERYX BIOPHARMA… no real news, just days and days of weakness.

(NKTR) NEKTAR THERAPEUTICS… no real news, just days of weakness.

(REDE) RED ENVELOPE… no real news, although for an ‘online of high-end gifts’ it is pretty shocking that I have yet to meet anyone who has bought from them online.

(STAA) STAAR SURGICAL… very thin volume, no news; not being run by stars?

(TRMP) TRUMP ENTERTAINMENT… The truth is that this DIDN’T CLOSE on a low, but it hit a new since coming public after the recapitalization in 2005 and deserves to be noted.  Hopefully The Donald won’t sue us for saying something negative like he has been known to do, but this stock has been a stinker.

(UBET) YOUBET.COM… You can bet it is hard to find bulls or bears in this name.

(WON) WESTWOOD ONE INC… This was down close to 15% at one point but managed to come all the way back on 4-times average volume to a 10-year ("TEN") after traders bought it back up after Citigroup downgraded it.

Jon C. Ogg
July 13, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: July 13, 2007 – 3:03 pm in HI/LOW, , , , , , , , , ,