Ted Hu of Williams Capital Group initiated coverage of United Companies with a "buy" rating.

His 12-month target for United stock is $35.

The subprime mortgage company was trading at just under $30 at Monday's close.

Investors' fears of the delinquency rate at United are unfounded, Mr. Hu said, especially given the low loan-to-value ratio of its portfolio.

The Baton Rouge, La., lender had delinquencies of more than 10% during 1996, but chargeoffs were only 0.51%, Mr. Hu said. United is "well positioned for explosive growth," he added.

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