My analysis and why I own this
Lasted reported 2015 10Q had $684mm of assets and $173mm of debt for $510mm EV.
Reported December 2016 Debt paid down to $18.4mm, nearly debt free.
Loans listed in 2015 appear real to me, and SEC/FBI raid hasn't yeilded anything to suggest otherwise to date. Recent dividends, although small, imply some earnings are occuring. Real Estate has imporved in Texas over the 5 years.
Dallas based opportunistic investor has taken a 9.9% interest in the stock.
UDF has consistently won in the courts. The Lawsuit is viable as described by the Appeals court. The argument made by the company is damning for Hayman. Hayman shorted the stock at a very high ongoing cost to them, allegedly shopped the Ponzi story about UDF to major news organizations and none took the bait, so Hayman again alledgedly published their allegations on an anonymous website, only later to be discovered. Also the before mentioned alleged marketing of a fund to buy the very assets you assert are a ponzi scheme is shocking. If true, that fact pattern doesn't seem good for Hayman.
WSJ reports Hayman under SEC investigation for market manipulation on UDF this past weekend, likely tied to the info above, certainly has to be concerning for Hayman (and irony in that WSJ wouldn't published Hayman claims per discovery presented in the lawsuit material).
Concerns about UDF would be lack of financial data for 5 years (in my opinion reflects poorly on management for not being forthcoming on the portfolio...if you can tell us debt in 2016, you can tell us assets and debt in 2020), consistent deflection by IR staff when asked about when data will be available. Company seems largely focused on litigation, although says it is lending again. My question, is the company burning the proverbial furniture (our assets) to keep the lawsuit/business going.
My conclusion. UDFI Current market cap at $52mm is trading at 1/10th of last reported (2015) net asset value. Stock near historic low. If not "burning the furniture" the investment based solely off asset recovery seems strong (recovery on loans many of which were secured should yield far better then 10% mark in today's market). Lawsuit is a lottery ticket/upside and UDF has been consistently winning.
Open minded to hear from dissenters.
