Replies to post #119362 on Zeev's Turnips Patch-No Politics (ZEEV)

[nspolar]

ml, I follow BEMA and hold a fair amount.

Been only slightly concerned about two fairly significant holdings of late, BGO and DROOY. Only slightly. DROOY my only SA holding.

Bottom line I believe is both need 400 POG, as do a lot of other issues, before they really smoke. I think that is coming, sooner as opposed to later. Charts imo are bullish for break to upside.

A primary reason I hold both is due to their liquidity, which can at times be a negative. However, many real juniors have limited amounts, so I likewise limit my involvement in each.

KRY really smoking here lately. Wished I had more than I do, but it was too risky to buy en masse. It may be a real sneaker, if they can line up all the marbles.

[brainlessone]

mng

[otraque]

S&P lowered FRE to AVOID yesterday--stock up today with defenders speaking out and also upgrade from sell to buy, with target of 60 by Sandler O'Neil.I think i have seen this movie several times before:)
There are like 50 news items on FRE/FNM the past 24hours--scanning them now.
http://biz.yahoo.com/prnews/030612/nyth136_1.html

S&P Equity Analyst Reduces Opinion on the Stock of Freddie Mac to 'Avoid' from 'Hold'
Thursday June 12, 4:21 pm ET


NEW YORK, June 12 /PRNewswire/ -- Standard & Poor's equity analysts have reduced the equity STARS ranking on the shares of Federal Home Loan (NYSE: FRE - News), commonly known as Freddie Mac, from a three-STARS "Hold" to a two-STARS "Avoid" at $46.96 per share. A leading provider of independent research, indices and ratings, Standard & Poor's made this announcement through Standard & Poor's MarketScope, its real-time market intelligence service.

"We are downgrading the shares of Freddie Mac to 'Avoid' from 'Hold,' based on recent events that give us cause for concern," says Erik Eisenstein, Mortgage Companies, Thrifts, and GSEs Equity Analyst, Standard & Poor's. "We believe the company has been less than forthright in giving investors adequate information regarding recent investigations. Only yesterday, the company disclosed that an SEC inquiry had been in effect since January. We are concerned about the magnitude of the investigation and its potential political fallout.

"Our view is that a recently created void in management, following the unprecedented departures of the Chairman, CEO and CFO, as well as time spent to answer inquiries, could result in near term execution risk for the company. The company has noted that a pending earnings restatement is expected to result in higher reported earnings for the last two years. However, due to issues of revenue recognition, earnings are expected to be more volatile going forward. Given both the restatement and added volatility, we have less confidence in our earnings estimates."

"We are cognizant of the shares' present discount compared to historical valuation. Nonetheless, we suspect investors will be increasingly focused on near term execution issues and not historical valuation in assessing expectations of share performance. Regarding the political spectrum, we do not believe regulators will take action to jeopardize the mortgage debt market (e.g., removing or mitigating the GSE implied subsidy), particularly considering the mortgage market's help in holding up a fragile economy.(edit- this avoidance now to say "no regulation changes" implies this is not the right time to lift the rug and have cockroaches running around, that being that government when KNOWING they have a house of cards(crawling with bugs no less), know their prime responsibility is to straight of face and in calm tones "problems, what problems, we got no problems, and hey look we do have Badges though, people with Badges don't fib" --gd) However, when the mortgage market cools off and the economy recovers, regulators may look for reform. (edit-gees that sounds so simple and nice i think the analyst just put on his rose tinted glasses and took a snort of N2O.---ah you cynic gd)

"We believe the shares are likely to underperform in the near and intermediate term as investors digest recent events, particularly the potential magnitude of regulatory investigations, and become more comfortable with the level of post-restatement earnings.

"Risks to our assessment include: a stronger than expected mortgage environment; a quick resolution of regulatory investigations and/or the pending restatement; a sustained rebound in equity market valuations; and a more rapid rebound in economic activity than we anticipate," concludes Erik Eisenstein.

Standard & Poor's Stock Appreciation Ranking System (STARS), which was first introduced on December 31, 1986, reflects the opinions of Standard & Poor's equity analysts on the price appreciation potential of 1,200 U.S. stocks for the next 6-12 month period. Rankings range from five-STARS ("Strong Buy") to one-STARS ("Sell").

Standard & Poor's analytic services are performed as entirely separate activities in order to preserve the independence of each analytic process. In this regard, STARS, which are published by Standard & Poor's Equity Research Department, operates independently from, and has no access to information obtained by Standard & Poor's Credit Market Services, which may in the course of its operations obtain access to confidential information.

Standard & Poor's has the largest U.S. equity coverage count among equity research firms that are not affiliated with a Wall Street investment bank, analyzing 1,200 U.S. stocks. Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP - News), is a leader in providing widely recognized financial data, analytical research and investment and credit opinions to the global capital markets. With 5,000 employees located in 19 countries, Standard & Poor's is an integral part of the world's financial architecture. Additional information is available at www.standardandpoors.com.




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Source: Standard & Poor's

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