Ok, not really. The stock simply rebounded today based on comments that the company thinks this is an earnings trough and things look good for the fourth quarter and through 2008.
The stock rallied 15% today close at $17.03. Don't get too excited. It is still down from a high of $45 in February, and still below the $18 price target Bank of America had the right to buy common stock when BoA infused $2 billion into the company.
The company reported a $1.2 billion dollar loss, including losses from operations, loss due to the 10-12 thousand works it plans to lay off, and increasing it's provisions for loan loss over 2000% year over year. The loss doubled analysts estimates and the company still gain more than it has in over two decades.
I'm still not buying this. "No one can do what Countrywide can," is their famous motto. Maybe it should be more like, "Nobody claims what Countrywide can." Have you noticed not one other major bank is saying that the mortgage market is stable or that they see gains for the coming quarters? So how is Countrywide going to pull this off?
I'm really not sure. If they can really pull it off, my hat is off to them. But there are a number of problems.
1) The possible SEC investigation into Angelo Mozilo stock sales.
2) Consumer confidence in the company is at an all time low.
3) They are losing market share due to consumer sentiment and changing their style, focusing on more conventional/conservative lending guidelines.
4) Does the company realize that we are in the middle of the largest housing slump since the early 90's?
I know, I know, the company announced that they were going to aid some 82,000 homeowners to help them avoid foreclosure. Well, first of all, they should. It is more profitable to keep these loans performing and charge some closing costs as opposed to letting the homes fall into foreclosure and have to drop the properties onto market. But this won't be enough to really give the company a shot in the arm it really needs.
We will see what happens. But I'm not smoking what Angelo is selling...that is for certain.
The company reported a $1.2 billion dollar loss, including losses from operations, loss due to the 10-12 thousand works it plans to lay off, and increasing it's provisions for loan loss over 2000% year over year. The loss doubled analysts estimates and the company still gain more than it has in over two decades.
I'm still not buying this. "No one can do what Countrywide can," is their famous motto. Maybe it should be more like, "Nobody claims what Countrywide can." Have you noticed not one other major bank is saying that the mortgage market is stable or that they see gains for the coming quarters? So how is Countrywide going to pull this off?
I'm really not sure. If they can really pull it off, my hat is off to them. But there are a number of problems.
1) The possible SEC investigation into Angelo Mozilo stock sales.
2) Consumer confidence in the company is at an all time low.
3) They are losing market share due to consumer sentiment and changing their style, focusing on more conventional/conservative lending guidelines.
4) Does the company realize that we are in the middle of the largest housing slump since the early 90's?
I know, I know, the company announced that they were going to aid some 82,000 homeowners to help them avoid foreclosure. Well, first of all, they should. It is more profitable to keep these loans performing and charge some closing costs as opposed to letting the homes fall into foreclosure and have to drop the properties onto market. But this won't be enough to really give the company a shot in the arm it really needs.
We will see what happens. But I'm not smoking what Angelo is selling...that is for certain.
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