FMT AND MTH, good stocks?

Question

I bougth these two stocks, FMT and MTH, Monday night. Which, was the night before the crash. These stocks have been going down ever since and i was wondering what to. Buy more, sell, hold? FMT has delayed its conference call, but there is a rumored buy-out at a higher price. FMT is taking a major beating after hours and MTH just seems to float along. Did i choose the right stocks and will these two perform as they predicted to? Any advice or comments would really help.

Answer 1

You bought them Monday? If you don't mind, may ask what your entry signal was?


Regardless, here's my thoughts.

FMT - fundamentally is not very strong. It's in the regional bank industry which is doing not very well at the moment. Institutional money is flowing out of it and its price rank is pretty bad. Technically, this stock is not in my top 5000 or so either. It's been below its moving averages and until it shows some signs of life, I'd be much more inclined to short the stock.

MTH - fundamentally, the stock is a bit weaker on some facets. However, the industry is a little stronger then FMT's. On an earnings basis, the stock is not that bad, but we don't drive the price, institutions do and they don't like the stock at all. Acc/Dist, an indicator of big money is at 9.8 (out of 100), which means money is POURING out of the stock rather than in. This would help explain what we're seeing technically where this chart/stock has been in a steady decline again the past three months, approaching its two year low at 36. Next target for the stock, 36.

Personally, I'd exit those stocks and either flip to the short side, or find one of the few uptrending stocks out there like CEP or LEAP, or TSO.

Hope that helps!
(3/2/07)

Answer 2

I own shares in MTH, and I'm holding. It's a profitable company with a good business model, but there's no telling when the housing market will pick up. I don't expect shares to go down any more--the p/e is 3.3!--but I don't expect any significant upward moves for a few months. If it goes down another 5 or 10%, consider buying more.

Answer 3

FMT get out NOW! It will get worse. MTH is iffy I don't like it the market is finnaly seeing what is wrong with these "exoctic mortgages" and the fallout has only just begun.