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Released on Sunday, December 4, 2011, 7:00 PM ET
Pittsburgh, PA (SpeculatingStocks) - Dearfield Capital Corp. (NASDAQ:DFR ) also known as CIFC Corp. is an asset management firm which offers security products and gains income from the consulting services it provides in relation to collateralized debt obligations (CDOs) as a securitized asset.
As a services company, it’s not hard to understand why the profit margin is over 51%. CIFC is also fairly stable, having a current ratio of 3.49. The company likes to purchase CDOs on margin it would appear, and then sell them off in large chunks when it intends to roll-over its portfolio.
Because of this aggressive investment and divestment strategy, the firm has a volatility beta of 3.52 and can move as much as an entire dollar in a single day. CIFC has an outstanding EPS of $4.39 per share, but only has a P/E of 1.07—which is dramatically low, leading the price to currently be $5.07 per share (4:30 PM EDT, December 2nd, 2011).
Because the P/E is so low, this company could be undervalued by the general market, totaling its market capitalization at only about $102 million: that is a distinct possibility. Unfortunately, the technical indicators are divergent in their predictions. MACD shows an up-trend momentum in the basis of the stock, while the fast stochastics are coming in directly at medium price for the purchase. Relative Strength Indicators move so volatile the reading spikes one day and shoots back down the next.
What does seem normative about DFR is that it is still governed by the mystical Elliot wave theory. That is, since it just experienced a sharp increase in prices, the up-wave must now be countered by a down-ward shift. The stock could trend lower making it incredibly worthwhile to purchase. At the moment, DFR is sitting on a support at about $5.00 per share, with a longer held support at about $4.70 or $4.80 per share.
Be careful when investing in this firm, it has a daily volume average of about 10 thousand shares, which is decent for a small-cap such as this, but you want to be sure that you can get out with a stop-loss should things get out of hand. Compound this with the high volatility of this company, and you will definitely need to be vigilant.
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