Dlugosch Charges up Credit Card Firm
01/10/2003 12:00 am EST
We are pleased to welcome Jamie Dlugosch to our list of contributors to The Money Show Digest. The fundamentally-oriented, value advisor, whose mentor was the late Al Frank, has recently begun publishing a newsletter entitled The Rational Investor. For his top pick for 2003, the advisor looks at an out-of-favor credit card company, Metris.
"Metris Companies (MXT NYSE), the 10th largest independent credit card company, is our top pick for 2003. The selling in MXT over the last two years has created an opportunity for 'rational' investors. The company has experienced some of the same problems plaguing other consumer finance companies, mainly increasing loan delinquencies and defaults. However, the company appears to be weathering the storm. MXT is operating on a cash flow positive basis while its share price is trading below book value.
"The company is making the necessary adjustments to return to profitability in the near future by reducing expenses and stabilizing its loan portfolio. At the same time, the company’s proprietary database and data mining techniques may make the company an attractive acquisition candidate. With GDP expected to rise by 3%-4% in 2003, MXT should benefit from a strengthening economy. Look for the shares of MXT, a fairly volatile stock, to increase in value in 2003."