Stock of the Year!

As you know, we had quite a year with this stock market. So I've gone bargain shopping for stocks lately. As Warren Buffet said, "Be greedy when others are fearful and be fearful when others are greedy". With careful analysis, I bring you my stock pick of the year:

NEW CENTURY FINANCIAL (SYMBOL: NEWC.PK)

What does New Century do?
What Does This Company Do? New Century is a subprime mortgage lender. In 2006, according to Inside Mortgage Finance an industry publication, it was the fourth-largest nonprime originator, with origination volume of $53.6 billion. New Century primarily sells the loans it originates to third parties, but the company is organized as a REIT and also managed a $14 billion portfolio of loans as of Sept. 30. The company is authorized to lend in all 50 states and has relationships with 47,000 independent mortgage brokers.

I mean people need to buy houses right? You need to live, and if you want to buy a house, you need a mortgage. I mean non-prime lender just mean they lend to people with less then steller credit score/history. Who has a good credit history in this country anyway? Everyone has credit card bills to pay. Look at our government, they are running on like trillion dollar deficit and their debt is "risk-free" and probably rated at AAA by S&P and Moody's. If I have $3000 credit card balance, my rating must be like AAAAAAA.

So New Century lend money to AVERAGE JOE, like you and me who has credit card debt but not as much as our government. I mean only rich people can afford to have a perfect credit record because they have so much money they would never default on any loan.

Here's the chart:

http://www.marketwatch.com/news/story/story.aspx?guid=%7B01DEA338-1967-4F48-8A4B-C8EF19A722BA%7D&dist=rss

Well, if the smart guy at Bear Stern upgraded the stock at $15, the stock is now trading at $1, it must be SCREAMING BUY! I mean, if the stock does trade back up to $15, that will be a return of 1400%! And if the stock trades back to its 52 weeks high- $52- that's a return of 5000%!

Talk about value!


If the Bear Stern guy isn't convincing enough, check out NEW CENTURY on morningstar.com:

Stock	Industry	S&P 500	Stock's 5Yr Average*
Price/Earnings	0.2	17.1	20.3	5.5
Price/Book	0.0	3.4	4.1	1.6
Price/Sales	0.1	4.7	2.9	1.5
Price/Cash Flow	---	19.2	14.7	---
Dividend Yield %	439.8	2.3	1.8	---

A dividend yield of almost 440%! Dividend doesn't lie! 440%! How can I lose?! This is VALUE !! I think VALUE is an understatement. Let me put it this way: It is a Ferrari for sale at the price of a Honda. Look at "the market" dividend yield...what a joke! And a P/E of 0.2 vs S&P 17! So I'm only paying 20 cents for every dollar of earning vs paying $17 for every dollar of earning in the other 500 companies. S&P 500 is ripping me off!

http://quicktake.morningstar.com/stocknet/StockValuation.aspx?Country=USA&Symbol=NEW&stocktab=valuation

I mean if 400%+ DIVIDEND return doesn't sound convincing. Check out New Century's headquarters at Irvine, California:


I mean with the recent run-up in real estate price in CALIFORNIA, this beautiful glass building must at least worth millions and millions of dollar. I mean a two family house probably cost over $ 1mil. in California. Imagine how much this beautiful tall glass building is worth!

At last, the share price! It's $1 a share! How can you lose?! I mean one share of Google is like $450 and they don't even have tall glass building. And with $450 you can get 450 shares of NEW CENTURY FINANCIAL! 1 share vs 450 share! $10 move in GOOGLE share price will give you $10 profit. $10 move in NEW CENTURY share price will give you $4500! Why would you buy expensive stock like GOOGLE? I mean, can you even call up GOOGLE? Google is a WEBSITE for god sake, its not a REAL business like NEW CENTURY. And we know what happen to dot com stock...remember the year 2000? I mean remember Amazon trading at $400? Where is it now?! If you pay $1 for something, and it goes down to like $0.05, so what? you lost $0.95- you can't do anything with 95 cents anyway. I can't even get like candy in New York for 95 cents. But if you buy something like GOOGLE @ $450 and it trades down like Amazon did. You lose like $410! I mean you can buy a lot with $410! Especially when you have credit card bills to pay!

Guys, this is what VALUE investing is ALL ABOUT! P/E of 0.2 and a dividend yield of 400+%! Does any stock get any cheaper?! This is a diamond in the rough, get in before its too late!





















DISCLAIMER: APRIL FOOOOOOOOOL!!!!!!!!!!!!!!!!!!!!