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StockTradersPress.com |
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A Corporate Communications
Corp. Publication ---- All Rights Reserved |
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Long-Term Report |
February 26, 2004 |
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| STRONG BUY; UPGRADE |
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| FREMONT GENERAL CORP. (NYSE) FMT |
$ 22.00 |
| 52-week range |
$4.90-$22.24 |
| Market Cap |
$1.67M |
| Shares Outstanding |
75M |
| Book Value |
$7.84 |
| Price/Book |
$2.66 |
| Average Daily Vol. |
687.8K |
| Target Price |
$29.00 |
| Target Percentage |
32% |
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| Yesterday, Fremont General reported
4th quarter 2003 operating results. Again, the company announced
significantly better then expected results of quarterly earnings
of $.94 per share. These earnings were 113% higher than the
comparable period in 2002. For the full year of 2003, Fremont
General earned $2.98per share, which compares with the $1.55
earned in 2002. |
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| In addition to extraordinary earnings,
the company further strengthened its balance sheet. Free cash
balances rose to $144 million, loan loss reserves were increased
to 1.17% of loans. It should be noted that the loan loss provisions
is the highest permissible, even though Fremont’s actual
loan loss experience is substantially low. Write-offs during
the past year were only .001% of outstanding loans. |
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| Over the past year, the management
has successfully streamlined operations and strengthened its
dealer organization. |
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| The stock of Fremont General has been
a very successful investment since our recommendation last February
2003 at $4.50 per share, which represents a gain of 500% for
the past year. |
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| Given the strong operating environment
for Fremont General, we estimate the company will earn about
$3.65 per share for 2004. Accordingly, we are raising our target
price from $23 to $29 per share. At $29 per share, the stock
would be selling at a modest 8 times of estimated earnings,
which are quite conservative. |
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| UPGRADE;
Target Price: $29.00 |
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