Default Concerns Weigh Down American Home Mortgage
Concerns about mortgage defaults weighed down shares of American Home Mortgage Investment Corp. (AHM). The stock price tumbled $2.46 to close at $21.36.
posted by FC Market News at 10:30 AM
1 Comments:
In an Operations Update last week, AHM released its pipeline data showing only 5% of its loans having credit scores less than 620.
In addition to being oversold, AHM has amazing fundamentals.
-4 P/E Ratio
-Operating Margin: 46%
-20% insider ownership
-$400 million in cash (40% of market cap)
-Return on Equity: 22%
-2006 EPS: 4.96/share
And most important of all, because AHM is a REIT, it must payout a certain percentage of its income in the form of dividends. During this 50% fall in share price, AHM has seen its dividend payout rise to 19%! If you’re afraid this dividend will be cut, consider that AHM has been steadily increasing its payout every quarter and has over $400 million in cash.
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