Is Countrywide Credit Industries a takeover candidate?
Plenty of observers have suggested that the entire mortgage industry is in play these days, and rumors are a dime a dozen. But so far, there has been not a whisper that anyone is courting the Pasadena, Calif.-based giant.
A new stock report by an analyst at C.J. Lawrence, New York, could well change matters.
The report says the private valuation of Countrywide could be as much as $50 a share, about triple its current market price.
Drastic Departure
The report is especially interesting because it was written by Karel Carnohan, who just a few months ago was the investor relations director for Countrywide. And her valuation approach departs drastically from what has been used by other analysts.
"I have a problem with the Street's way of doing things," she said. "They can do their valuation on the back of an envelope. They look at the size of the portfolio and put a number on it, and that's it. That is in my opinion naive. You have to look at a mortgage company as an ongoing concern."
The components of her $50-a-share estimate: the servicing portfolio, about $13 a share; the loan production and servicing capability, $22; gains in market share, $4; and growth opportunities and new products, $12.
