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?

Vitaliy Katsenelson

I am the CEO at IMA, which is anything but your average investment firm. (Why? Get our company brochure here, or simply visit our website).

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”

I’ve written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (I’m working on a third - you can read a chapter from it, titled “The 6 Commandments of Value Investing” here).

And if you prefer listening, audio versions of my articles are published weekly at investor.fm.

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