Here is my original July 29, 2009 post when I told readers the $20 per share offering price was too high.
Here is my update on December 28, 2009 when I said that the price of the stock, then $17.34 per share was still too high.
Well, today I'm still right. PMT is trading at $16.34 per share this very moment and has never reached its $20 offering price. IPO investors have been underwater since Day #1.
PMT is now profitable, reporting seven cents per share in the first quarter of 2010. This is excellent news for a good company with great people behind it. But the sector will get hit by rising interest rates and a new recession in early 2010.
I like PMT. I said so a year ago. Just not at this price. By any measure the valuation is rich starting with its negative price earnings multiple. PennyMac has a trailing P/E of -$.27.
I'll check back again in the future. Like I said, great sector, great people, great company, just too expensive.
Robert J. Abalos, Esq.
