Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Playing the Unraveling Housing Market


Now you too have plenty of reasons not to enjoy your weekend.


Given my reluctance to be short the homebuilders at this point, in the past few days I have received emails asking for collateral ways to play the housing unraveling. This is becoming even more relevant now that H&R Block (HRB) is already feeling the squeeze on the lending side. So here are a few names - many rather obvious probably - with the caveat that they are even less of the "advice" nature than usual given that I really haven't looked into most of them:

Mortgage Insurers: Radian Group (RDN); The PMI Group (PMI); Triad Guaranty (TGIC); and MGIC Investment (MTG).

Consumer Finance Cos.: Capital One Financial (COF) - this is the only name I have been short for longer than I care to admit and it feels like it's taken even longer to start working; old "friend" Portfolio Recovery Associates (PRAA) (do a search for my earlier pieces); and Asta Funding (ASFI).

Broader Financials - which Prof. Succo already mentioned today on the Buzz - such as Washington Mutual (WM), Accredited Home Lenders (LEND); Herb's long lost friend Novastar Financial (NFI); and New Century Financial (NEW). One not mentioned so far today is Wachovia Bank (WB), which is in the process of acquiring ARM's heavy Golden West Financial (GDW). I think there is a risk of buyer's regret if that deal goes through.

Smallish ARM's focused lenders: Downey Financial (DSL) and BankUnited Financial (BKUNA); and lastly condo lender Corus Bank (CORS) - also in Herb's bullseye.

One name that I've yet to figure out whether it may actually benefit from the mortgage problems is Ocwen Financial (OCN).

The only Index I know that gets close to being a good proxy - it does have options - is the KBW Mortgage Finance Index (MFX).

Now you too have plenty of reasons not to enjoy your weekend.

< Previous
  • 1
Next >
Positions in COF, BKUNA, RDN
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos