AAMC... This one is the stock of the year from Doug Kass, who has called market movement well the last few years. Doug's pick last year was ASPS, go take a look at the chart and you will get interested in this year's pick. This one is a spin off from last year's stellar pick and we believe has a good chance to double as he suggests in his latest letter. AAMC, or Altisource Asset Management, will manage many of the back office work for foreclosed homes in their portfolio. This business is growing faster than any other business in the country currently. ASPS was the first play in the pipe on the foreclosure business. Now the homes are starting to come out of the other end of the foreclosure process as homes ready to be sold off by banks and the federal government. The states AAMC is operating in are those banks where judicial process is not mandated. If you do not grasp the difference between judicial and non-judicial states look it up as the prior approach is causing significant backlogs in the foreclosure process hindering economic activity in those states. SBY, a stock we mentioned in our post just before this one, is buying up these homes, repairing and renting them out. There is a private business American Home.com that is doing the same and could come public soon I like even more. Frankly many home run stocks in the next few years are in the clearing the foreclosed homes business and AAMC looks to do well. This stock got public notice yesterday from several websites and jumped $4 or so to $84. We much prefer to get it at $80 and hope once the buzz is worn off it will drop back some.
HFC.. Holly Frontier Corp. is one of Goldman Sachs conviction picks for 2013. After some research of all their picks I like this one best. It has a 6% plus yield and growth prospects. The growth prospects come from the increasing oil being found in North Dakota Bakken area and being pumped down to the Gulf coast to be refined in HFC's refineries. The other area showing significant increases in oil production is West Texas and there the fracking technique is rapidly making that area the growth play in the oil and gas business in the US. HFC's refineries here are right next door. HFC has shown smarts in their business in mergers, in keeping expenses in check, and frankly being in the right place at the right time. This stock could show a 50% increase this year if Goldman is right and we agree. They should add to their already impressive dividend and I would not be surprised to see HFC add some refineries this year from purchases. Buying in the low $40's here is good.
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