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Author Topic: CAFI another financial to SHORT
stocktrader22
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This one has held up way to well! Bank invovled with mortgages with a 41 P/E. I don't think so! No earnings growth either....http://finance.yahoo.com/q?s=CAFI

What am I missing here, seems like this one has barely gotten hit! From their 10Q

"The company's lending activities include origination of commercial real estate and business loans; consumer loans; residential conventional fixed-rate and variable-rate mortgage loans for the acquisition, construction, or refinancing of single-family homes; and construction and permanent mortgage loans on condominiums, multi-family, and nonresidential properties"

"For the first quarter of 2008, we recorded a net loss of $1.0 million, or ($0.14) per share. Our financial results for the first quarter of 2008 were significantly impacted by the economic and housing slowdown. The weak economy impacted our balance sheet by reducing demand for loans and increasing nonperforming assets. Credit quality continued to deteriorate as nonperforming assets rose to $34.0 million at March 31, 2008, and net charge offs and the provision for loan losses totaled $1.1 million and $2.3 million, respectively, during the quarter."

"As we noted in our annual report on Form 10-K for December 31, 2007, we projected and are now experiencing a reduction in our borrowing capacity with the Federal Home Loan Bank of Cincinnati (FHLB) and with other lending institutions. Our increasing nonperforming loan portfolio and reduced earnings are the primary drivers for this liquidity tightening. Since we have historically relied heavily on borrowings from the FHLB, our balance sheet was significantly leveraged at December 31, 2007, even though we made progress during 2007 to reduce our overall borrowing levels. To counter this reduction in borrowing capacity and to ensure we had access to funding in case we encountered significant losses or liquidity demands, we increased brokered deposits by $26.9 million during the first quarter of 2008 and reduced borrowings further. This strategy was defensive and had a negative impact on earnings as funds in excess of our borrowing reductions had yet to be deployed into loans or securities at March 31, 2008. "

Loan originations during the three-month period ended March 31, 2008, were comprised primarily of $41.7 million in commercial loans, $17.2 million of loans secured by one- to four-family residential real estate and $12.9 million in consumer and other loans. Our intent is to continue to expand consumer and commercial real estate lending in future periods as a means of increasing the yield on our loan portfolio. In the near term, however, lending volumes of acceptable risk are expected to diminish due to a slowing economy and loan repayments will be used to reduce borrowings and build liquidity.

"While we have been successful in significantly reducing our debt over the last two and a half years, we find that in the aggregate we can borrow less than we could three years ago, despite offering additional forms of collateral. This has come as a result of our shrinking 1-4 family loan portfolio, which serves as primary collateral for our borrowings, and our high level of nonperforming loans. We had approximately $50.9 million of additional borrowing capacity available at the FHLB as of March 31, 2008, compared to $97.7 million at December 31, 2007.
The reduced borrowing capacity will somewhat limit our overall balance sheet growth as we have a lessened ability to leverage growth. We anticipate that we will have sufficient funds available to meet our current loan commitments. Based upon historical deposit flow data, our competitive pricing and management’s experience, we believe that a significant portion of our maturing certificates of deposit in 2008 will remain with the Bank, but recognize the significance of the risks discussed above."

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stocktrader22
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Banging the table on this one. Virtually no risk with 52 week high in the $12's

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tmanfromtexas
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Well this is my first short ever and it aint looking to perty. lol. shorted at 10.83 and its back to 11.40. Only stuck my toe in the water so I aint losing much if it dont turn. TMAN...

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stocktrader22
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Tman, when times were good this stock at its peak hit $18 like 5 years ago. This no longer has the growth, and its getting hurt with their mortgage loan exposure. Look at my original post, those are quotes from their 10Q, I'm waiting with my $11.15 short...remember this is a short covering rally, when oil goes back up and we get back to the usual down day in this bear market you will be fine IMO
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PCola77
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How'd you manage that? I'm showing the day low at $10.85.

quote:
Originally posted by tmanfromtexas:
Well this is my first short ever and it aint looking to perty. lol. shorted at 10.83 and its back to 11.40. Only stuck my toe in the water so I aint losing much if it dont turn. TMAN...


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tmanfromtexas
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quote:
Originally posted by PCola77:
How'd you manage that? I'm showing the day low at $10.85.

quote:
Originally posted by tmanfromtexas:
Well this is my first short ever and it aint looking to perty. lol. shorted at 10.83 and its back to 11.40. Only stuck my toe in the water so I aint losing much if it dont turn. TMAN...


My bad, it was 10.85, not 83. I hit the wrong number. Picky picky picky lol. TMAN...

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tmanfromtexas
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I also shorted WB at 11.15 after the news that regulators hit their offices this morning. this thing is up over 2 bucks since I shorted. I aint no better at picking these than long stocks. LMAO. TMAN...

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stocktrader22
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All will be good with CAFI my friend, really there just isnt much upside with this one, it wasnt even performing prior to credit crisis.

http://finance.yahoo.com/q/bc?s=CAFI&t=5y&l=on&z=m&q=l&c=

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tmanfromtexas
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To be honest stock, I aint worried about either of them. As I said, I am just testing the waters here. If they reverse and go down, I will make a few bucks. If not then I wont loose but a few. TMAN...

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stocktrader22
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The more I look at this the more I like this play as a short. This right here is saying they will have no growth for some time, and I expect their mortgage portfolio to continue to deteriorate.

"While we have been successful in significantly reducing our debt over the last two and a half years, we find that in the aggregate we can borrow less than we could three years ago, despite offering additional forms of collateral. This has come as a result of our shrinking 1-4 family loan portfolio, which serves as primary collateral for our borrowings, and our high level of nonperforming loans. We had approximately $50.9 million of additional borrowing capacity available at the FHLB as of March 31, 2008, compared to $97.7 million at December 31, 2007.
The reduced borrowing capacity will somewhat limit our overall balance sheet growth as we have a lessened ability to leverage growth. We anticipate that we will have sufficient funds available to meet our current loan commitments. Based upon historical deposit flow data, our competitive pricing and management’s experience, we believe that a significant portion of our maturing certificates of deposit in 2008 will remain with the Bank, but recognize the significance of the risks discussed above."

I really think this is going into the $7's, just patience required.

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stocktrader22
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I cant bang the table enough on this one. Its such a good risk reward its incredible. I mean max upside you will see is what $12.50?

Downside could go as low as $5, but I'm waiting to sell my first chunk at $8.50 and the rest at $7

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tmanfromtexas
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Got rid of wb but still hold this one. It would be nice to see 7. TMAN...

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stocktrader22
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quote:
Originally posted by tmanfromtexas:
Got rid of wb but still hold this one. It would be nice to see 7. TMAN...

The only reason we are not there is because of panic sellers dont exist since its low volume...but its more than obvious the business has been failing and hurting the past few years and it will continue its downtrend, just need patience to hit the target [Smile]

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stocktrader22
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Slow and steady wins the game...hoping this goes to around $10.30 tomorrow with a $10 break sometime this week
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PCola77
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LOL. I saw this on my watch list today and couldn't remember why I had it. Looking good so far, maybe I shoulda played it instead of watching [Smile]
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stocktrader22
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Well, everything with this one looks like a POS, only upside is that they do have a merger with first place financial closing in the 3rd quarter, except first place financial stock is crashing and deal might not go through. Even so until I see someone buying I'm staying short

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RagingBull
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STOCK let me know when you going to cover so i could buy and ride the short covering
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stocktrader22
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LOL why would you want to touch this thing right now as a buy?
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stocktrader22
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lol slow and steady wins the race here!

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stocktrader22
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$9's coming

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stocktrader22
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$10.32..$9's coming

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R1 Man
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You check the volume? It has pretty much ZERO! Even if it does what you want...if there is ZERO volume, then your spinning your wheels.
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stocktrader22
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plenty of days with 21k volume so $210k shifting..Im not playing that much! LOL

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stocktrader22
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Well that took a while, but $9.50 [Smile]

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stocktrader22
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$7.20 boo ya

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stocktrader22
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6.62

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stocktrader22
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In the $4's now.
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greenman
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Lol, still shorting?
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stocktrader22
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quote:
Originally posted by stocktrader22:
Well, everything with this one looks like a POS, only upside is that they do have a merger with first place financial closing in the 3rd quarter, except first place financial stock is crashing and deal might not go through. Even so until I see someone buying I'm staying short

As i thought may happen, merger cancelled.
http://biz.yahoo.com/pz/081128/155561.html

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stocktrader22
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$12's to $2....NICE!!!!
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stocktrader22
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$12 when I posted to .57 cents now

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