September 7, 2007 | Posted by

First Marblehead – a Value But Not for Light Hearted

I’ve been a big fan of First Marblehead’s (FMD) stock for couple months now, and it looks like an incredible value today, trading somewhere around 7-8 times earnings. Though I have to mention this stock is not for the light hearted, as it has a lot of myths surround it.

Tom Brown, who I am very proud to have as my book endorser, wrote a harsh but wonderful piece today dispelling a lot of myths surrounding FMD. In addition, the company has no debt, 15% of its market cap is in cash and it has been growing earnings 30-50% a year. Its margins will likely compress going forward, thus its growth may decline from its past levels, but it should be in double digits.

Oh, did I mention FMD just raised its dividend to 3% yield?

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Short URL: http://ContrarianEdge.com/?p=223

  • Slava

    Что случилось с ФМД (Первоя Мраморная Голова?) No follow up on your glowing report? Are opaque financials of most financial companies the norm these days? I thought CFA members should have dug a little deeper to uncover the true picture. All the best with your book.

  • PlanMaestro

    Vitaliy, can you do an update on your view of the FMD situation?

    Thanks

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