BargainValueHunter Posted February 19, 2012 Share Posted February 19, 2012 http://online.barrons.com/article/SB50001424052748703786004577221581670997506.html CIT trades for 0.9 times estimated 2012 tangible book value of $43.54 per share, and some investors think book value is understated, as CIT was overly conservative in writing down bad loans during its bankruptcy proceedings. One hedge-fund manager who owns the shares estimates tangible book is $52 or more. "You can assume that things have gotten better, and the marks they took seem pretty aggressive in hindsight," says Benjamin Ram, a portfolio manager with Oppenheimer Funds, another CIT investor. "That gives me a lot of confidence in the actual value of the balance sheet. When you look at a lot of financials, you have to just believe what they tell you." Many hedge funds own CIT because they think it eventually will be acquired for a significant premium by one of many banks starved for commercial assets and access to the middle market. Also appealing are the lender's $8.4 billion in cash and $4 billion in deferred-tax assets. By some estimates the company could fetch north of $50 a share in a takeout. They liked CIT a year and a half ago too... http://online.barrons.com/article/SB50001424052970203599504575535821640571024.html#articleTabs_panel_article%3D1 CIT has stripped down its loan portfolio by selling noncore assets. Pretax earnings of $353.1 million for the first six months of 2010 were boosted by a $130 million gain on the sale of about $3 billion in assets and operations in Australia and Canada, as well as $113 million of recoveries in pre-2010 charge-offs. The company has also laid off about 7% of its work force. Reports have the company subletting its office space at 505 Fifth Avenue in New York. Link to comment Share on other sites More sharing options...
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!Register a new account
Already have an account? Sign in here.Sign In Now