[movermike] movermike: Accredited Home Lenders

[Email subscription to blog articles]

Posted by movermike:
Accredited Home Lenders
http://www.movermike.com/posts/1176227273.shtml


   This story caught my eye:

     Accredited Home Lenders Holding Co.âs [ticker: LEND] largest
     shareholder has sold all but 760 of its 3.09 million shares in the
     company, according to an updated 13G filing with the Securities and
     Exchange Commission.

     [...]

     Late last month, Accredited took out a $200 million loan, at 13%
     interest, from San Francisco-based hedge fund Farallon Capital
     Management, which owns 7% of the company. Around that same time,
     Chicago-based Citadel Investment Group (Sequoia Fund) bought 4.5%
     of Accreditedâs outstanding shares.

   The last three years of their [1]Sequoia Fund's performance:

   12/31/04
           Fund 4.66% S&P 10.88%
   12/31/05
           Fund 7.78% S&P 4.91%
   12/31/06
           Fund 8.34% S&P 15.80%

   I thought in light of the bankruptcies in the sub-prime market, it
   seemed a risky move to loan $200 Million in what appears to be a way
   to save your $53 million stock investment. Here's what has happened to
   the stock price:

   [lend]

   Below are the major institutional holders of Accredited Home Lenders
   as of Dec 31, 2006:

   EARNEST PARTNERS LLC 2,438,472 9.65 $66,692,209 31-Dec-06
   NOW SOLD - EUBEL BRADY & SUTTMAN ASSET MANAGEMENT, INC. 2,056,941 8.14
   $56,257,336 31-Dec-06
   FARALLON CAPITAL MANAGEMENT LLC 1,975,000 7.82 $54,016,250 31-Dec-06
   GOLDMAN SACHS GROUP INC 1,797,870 7.12 $49,171,744 31-Dec-06
   RUANE, CUNNIFF & CO, INC 1,687,476 6.68 $46,152,468 31-Dec-06
   PUTNAM INVESTMENT MANAGEMENT, LLC 1,038,339 4.11 $28,398,571 31-Dec-06
   Wesley Capital Management, LLC 976,600 3.87 $26,710,010 31-Dec-06
   Barclays Global Investors UK Holdings Ltd 791,473 3.13 $21,646,786
   31-Dec-06
   AQR CAPITAL MANAGEMENT, LLC 700,959 2.77 $19,171,228 31-Dec-06
   MORGAN STANLEY 676,699 2.68 $18,507,717 31-Dec-06

   The position at the top is Earnest Partners L.L.C run by Paul E.
   Viera, widely praised as one of the Top 50 Black Executives in
   Atlanta.

   [manager22_1.gif]
   [2]Paul E. Viera

     Chief Executive Officer EARNEST Partners L.L.C. Age: 42 Education:
     B.A., University of Michigan;M.A., M.B.A., Harvard Business School;
     Responsibilities: He oversees the operations of EARNEST Partners,
     which currently has $13.5 billion in assets under management. In
     addition to managing three asset classes at his own firm, Viera
     subadvises for The Harbor Fund's Small-cap Value Fund. (where as of
     Jan 31, 2007 held 500,000 shares of Accredited Home Lenders In 1993
     he developed return pattern recognition, an investment methodology
     used to select equities at his Atlanta-based firm, which has led to
     much of his success.

   Isn't it interesting how major investors can make the same mistakes
   ordinary investors make: doubling up, selling at the bottom and buying
   a falling knife. They also could be right. We'll know this year!

References

   1. http://www.sequoiafund.com/investment_return_table.htm
   2. http://www.blackenterprise.com/Archiveopen.asp?Source=/archive2002/10/1002-35.htm&p=4