24/7 Wall St.

After reviewing the 52-week lows today, it was almost the same old trend we have been seeing day in and day out…. Lenders… Banks… Homes… and Consumer…What is obvious is that the FOMC can continue to cut rates, but the consumer is stretched and the lenders don’t want to loan more funds.  Hell, the borrowers might not even want to borrow either. 

Freddie Mac (FRE) is hitting this list today and that is actually a low back to 2004.  Fannie Mae has not hit the implode list, even after sending out payment from a class action last night.  These might not all be at 52-week lows now, but lending stocks that hot new 52-week lows today are:

Lenders: (BKUNA) Bankunited Financial….habitual; (C) Citigroup; (CFR) Cullen Frost Bankers;
(CMA) Comerica; (FAF) First American; Indymac (IMB); (RF) Regions Financial; (SNV) Synovus Financial; (SOV) Sovereign; (VLY) Valley National Bancorp; (WM) Washington Mutual; (ZION) Zions Bancorp

Loan insurers: (PMI) PMI Group… not a lender, but the mortgage insurer we all hate; (RDN) Radian… financial enhancements to mortgage lenders; (TGIC) Triad Guaranty, same business as PMI.

Builders & Housing-related: Beacon Roofing (BECN), Brookfield Homes (BHS), Builders Firstsource (BLDR), Building Materials (BLG), Centex (CTX), Home Depot (HD), Lennar (LEN), Masco (MAS), M D C Holdings (MDC), Move (MOVE), Meritage Homes (MTH), Palm Harbor (PHHM)….

The earnings out of financial stocks are of course an issue, but interestingly enough yesterday Fox Business News had an exclusive interview with Warren Buffett.  His comments were not any great hope that the worst has been seen in housing, and that those stocks still were not yet cheap.  Take a look at Buffett’s comments that he gave exclusively to Fox Business News:

“I didn’t buy a share.  I look at them.  I look attheir debt, their equities.  I look at everything.  I’m waiting untilthey’re under priced.  That’s what I look for with any security.  And,I don’t think they’re undervalued. Starting 30 minutes, ending 18months ago – that year – we probably had more home builders offer toBerkshire where the managements wanted to see the business that I’veever seen in any industry.  A significant percentage of thepublicly-owned home builders, when their stock was flying high andtheir management was talking bullishly, were trying to sell theircompanies.  Apparently they knew what was going on or likely to go on.Though, I don’t think they saw it coming as extensively as it did.”

Jon C. Ogg
October 19, 2007