Zacks Analyst Blog Highlights: Washington Post, Fannie Mae, Freddie Mac, PMI Group and MGIC
July 14, 2008 7:19 AM ET
- Stocks mentioned in this article
- Fannie Mae Ord Shs (FNM) Stock Quote, Chart, News, Add to Watchlist
- Freddie Mac Ord Shs (FRE) Stock Quote, Chart, News, Add to Watchlist
- MGIC Investment Corp (MTG) Stock Quote, Chart, News, Add to Watchlist
- PMI Group Inc (PMI) Stock Quote, Chart, News, Add to Watchlist
- Washington Post Co (WPO) Stock Quote, Chart, News, Add to Watchlist
Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Washington Post WPO, Fannie Mae FNM, Freddie Mac FRE, PMI Group PMI and MGIC MTG.
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579
Here are highlights from Friday’s Analyst Blog:
News Not Good for Wash Post
More than one-third of The Washington Post’s WPO revenue comes from newspapers and broadcasting businesses that are in secular decline. As readers migrate to the Internet and TV viewers seek other forms of entertainment, ad dollars shrink. The poor economy and consequent weak ad spending are exacerbating the deterioration, with no visibility to improvement.
WPO’s education and cable divisions are two bright spots, well-positioned to continue generating double-digit operating income. Nevertheless, the stock is trading at 17x 2009E EPS, a substantial premium to our estimate of its 5-year growth rate, at a time of high uncertainty.
The Spanking of Fannie (& Freddie)
The shares of the two giant Government Sponsored Enterprises (GSEs), Fannie Mae FNM and Freddie Mac FRE have been in an absolute freefall over the past week. We have long warned that the attempts to put the burden of the mortgage crisis on the GSEs was misguided and would eventually put the two of them in peril.
If mark-to-market accounting is used, it seems very clear that they are very undercapitalized. Even though the underwriting standards at the GSEs were generally better than for the private label mortgage backed securities that have already blown up, in retrospect they have proved to be too loose. In part this was because FNM and FRE relied on private mortgage insurance from firms like PMI Group PMI and MGIC MTG which now appear to be on the brink of insolvency themselves.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Web Content Editor
Copyright 2008 Business Wire