Capitalizing on the implosion of the Sub-Prime lending market
With points taken from Jim Cramer, of CNBC's 'Mad Money'
The recent implosion of publicly listed sub-prime lending companies has lead to panic and confusion in the world's major markets. Simply put, Sub-prime lenders are companies whom lend to borrowers who do not qualify for loans from mainstream companies. The problem is, a lot of these companies lent out more money than they had access to. Accompanied with rising interest rates, homeowners have been defaulting on their mortgage loans to such a degree, that the sub-prime lending companies have been forced into bankruptcy. This is a MAJOR WAKEUP AND SHAKEDOWN for the real-estate market and is general considered to be the first indication that the housing market is headed for a meltdown
How can I capitalize from a housing market meltdown when the major markets are so turbulent?
The major markets have been bleeding a lot of red lately, but not in every sector. If you want to profit off of the housing meltdown, the place to allocate part of your portfolio is the foreclosure market. As the housing market crumbles, the foreclosure market skyrockets. In fact, in many foreclosure stocks, we can see a spike in volume and activity prior to the housing meltdown. This was our best indicator that something bad was about to happen.
What are foreclosure stocks?
Foreclosure stocks are basically companies that purchase real-estate and assets from banks and municipalities and a discount and sell into a strong market. When a property is foreclosed and repossessed, the bank or municipality liquidate the property or asset for cash. The foreclosure company resells the property and a premium, or holds the property until the real estate market heats up again. In times where the housing market is turbulent, these companies can post profits of up to 800% on the sales of each foreclosed property.
A leader in this industry
Palomar Enterprises, Inc (PLMA) has been generating a lot of interest amongst penny stock investors recently. A profitable venture that pays hefty dividends, Palomar Enterprises Inc. (PLMA) is a real estate holdings and investment company. With over 25 million dollars in assets, and quarterly profits of $500,000, investors have begun to recognize the potential this stock has to make a major move. Professional traders have provided a slew of due diligence and technical analysis on this stock, which could easily net the early bird 1000% gains.
Palomar's strength is in it's ability to acquire foreclosure properties and turnover the properties for a premium. This is business model is projected to continue to be successful, based on a growing market trend of real estate foreclosures and payment defaults. Palomar has the potential to increase their asset portfolio ten-fold through acquisition of commercial and residential real estate. Currently, PLMA investors receive a dividend payment through their wholly owned subsidiary, The Blackhawk Fund.
PLMA was first profiled as a BUY at 0.01 on February 23, 2007:
Investors who purchased Palomar Enterprises (PLMA) at the trigger point saw returns of 300% in 3 days alone! I am currently upgrading PLMA to a STRONG BUY, based on the sub-prime meltdown, bleak market outlook for housing and lenders, and recent acquisitions and revenues increases of 70% announced by the company.
Current Chart and Analysis:
About Palomar Enterprises
CARLSBAD, Calif., March 20 /PRNewswire-FirstCall/ -- Palomar Enterprises (OTC Bulletin Board: PLMA) expects to record a 70% increase in revenue from first quarter, 2006 to first quarter, 2007. The increase in revenue is reflective of the shift in The Company's business model, to take advantage of the increasing Foreclosure Market. Palomar Enterprises is staying ahead of the real estate cycle by actively pursuing residential foreclosures throughout the United States, which can be purchased at 30% to 40% below market value. The Company increases the value of these homes by providing cosmetic improvements and in some cases, increasing the square footage of the property. These properties are then placed on the market and sold at a profit.
Palomar Enterprises is a licensed Real Estate Brokerage and Mortgage Lending Firm, specializing in Coastal Development Projects and the increasing Foreclosure Market. The Company is on pace to record the best year in its history, in terms of revenue growth and assets.