Tuesday, November 27, 2007

Freddie cuts dividend-Buy CIT!

Freddie cuts their dividend in half to .25, and is raising $6 billion in a preferred at a rate of 8.25%. The stock bottoms on this news. So buy CIT Group (CIT 24.47). What's that logic?

Citigroup paid 11% for $7.5 billion of cash, Freddie's paying 8.25% for $6 billion while CIT raised $2 billion today, at a rate of 7.875%. If CIT pays a lower rate, than C or government sponsored Freddie, then, the thinking goes, bond buyers probably know more than stock "players" who want stock investors to believe that CIT is in worse shape than it is.

CIT was up $4.62 on Friday, and was down $4.72 on Monday. Today it was up .73 cents. By the end of this week, you should be able to make a quick 11% on CIT.


Unknown said...

The NewsVisual article on Freddie Mac http://www.newsvisual.com/newsvisual/2007/11/knowledge-map-s.html talks about the company’s plan to issue $5 billion in preferred stock in order to raise capital the company requires to offset its huge losses in the subprime market.

zzyytt said...

canada goose
coach outlet store
nike air max 2017
golden goose sneakers
golden goose
goyard bag sale
off white jordan 1
pandora bracelet
kobe sneakers
adidas outlet