Beazer Homes bounce back; Accredited Home Lenders sinks; Fiserv picks up the check

By Evan Weinberger

New York, Aug. 2 - Bargain hunters looking for value targeted Beazer Homes USA Inc. in equity trading Thursday. But other companies in the troubled mortgage and homebuilding sectors, including American Home Mortgage Investment Corp., Radian Group Inc. and RAIT Financial Trust continued their declines.

But the biggest blow, by far, was absorbed by Accredited Home Lenders Holding Co., which announced that continued losses in mortgages could put the company out of business.

With one deal announced - Fiserv, Inc. said it has an agreement to buy CheckFree Corp. for $4.4 billion - the mergers and acquisitions market was quiet Thursday, but good news on jobs and some solid company earnings helped solidify Wall Street. Stock indexes closed higher for the second consecutive day Thursday, including another rally in the last half hour or so.

The Dow Jones Industrial Average gained 100.96 points, or 0.76%, to close at 13,463.33. The Nasdaq picked up 22.11 points, or 0.87%, finishing the day at 2,575.98.

"I can't give you a knowledgeable explanation unless it's one of the big funds that have their program set up to buy at the end of the day," one market source said when asked to explain the recent wild swings in the final minutes of trading.

Other market sources said the upswing over the past couple of days may just be bargain hunters looking to cash in on newly undervalued stocks.

"I think it's probably a function of that. As far as I can tell, there's no fundamental change," the source said. "Things are ticking up instead of down."

Beazer bounces back

Just a day after fending off bankruptcy rumors, Beazer Homes hit the comeback trail Thursday. The company regained some investor confidence when Chicago-based hedge fund Citadel Investment Group LLC announced that it had increased its stake in the Atlanta-based homebuilder to 5.7%.

Beazer Homes stock (NYSE: BZH) regained nearly all of its losses from Wednesday, picking up $1.56, or 13.59%, closing the day at $13.04. The stock lost 17.94% and closed at $11.48 Wednesday.

One market watcher said that investors with clear heads started to take a closer look at Beazer Homes after Wednesday's wild fluctuations.

"I think people were thinking it was overblown," the source said regarding the concerns over Beazer Homes' solvency.

Lending market mixed

While Beazer Homes rebounded, other companies in the mortgage lending and homebuilding sectors continued to lose ground.

The biggest loser on the day was Accredited Home Lenders, which plummeted nearly 50% at one point on news that the company may go out of business if conditions don't improve fast. The San Diego-based mortgage lender announced in a late Securities and Exchange Commission filing that increasing margin calls and adverse conditions were pushing the company ever lower.

"We cannot assure you that we will continue to operate as a going concern," the company said in the 10-K filing. "The industry experienced a period of turmoil which has continued into the second quarter."

Accredited Home Lenders is also being hurt by worries that its $400 million buyout by private equity firm Lone Star won't happen. "LEND, people don't think the deal is going to get done," a market source said.

At the end of the day, Accredited Home Lenders (Nasdaq: LEND) was lower by $2.90, or 35.32%, closing at $5.31.

Meanwhile, American Home, which rebounded slightly Wednesday from losing slightly more than 90% Tuesday, moved lower Thursday. The Melville, N.Y.-based mortgage lender lost 3 cents, or 2.03%, to close at $1.45.

Philadelphia-based Radian Group, which provides financial services to mortgage lenders, continued its downward trend Thursday after announcing Wednesday that it may have to write off its share of $500 million it invested in Credit-Based Asset Servicing and Securitization LLC, a private mortgage company that works in the crumbling subprime sector.

Radian stock (NYSE: RDN) lost $1.11, or 4.03%, to close at $26.40.

Radian's partner in C-BASS, MGIC Investment Corp., fared better Thursday despite saying that it, too, may be forced to write off its share of the $500 million invested in C-BASS. The Milwaukee-based mortgage insurer gained 72 cents, or 2.07%, closing at $35.48.

One other mortgage-related stock to fall belonged to RAIT Financial Trust. The Philadelphia-based real estate debt financer lost 28 cents, or 2.85%, closing at $9.54.

Fiserv pays the check

One deal was announced Thursday. Fiserv said it will acquire CheckFree for $4.4 billion. CheckFree shareholders will receive $48 per share as part of the deal, a 30% premium on the Norcross, Ga.-based electronic payment company's closing stock price of $36.83.

Fiserv, a business information management and services company based in Brookfield, Wis., said that the combined organization will improve product offerings and service.

"CheckFree's industry-leading payment and Internet banking capabilities will significantly accelerate our strategic transformation, extending our service platform to the largest financial institutions," said Jeffery Yabuki, Fiserv's president and chief executive officer, in a news release.

The deal is expected to be completed by Dec. 31. CheckFree chairman and CEO Pete Kight will be named to the Fiserv board of directors and will continue to work for the combined company.

Fiserv stock (Nasdaq: FISV) moved up ever so slightly on the news, picking up 31 cents, or 0.63%. It closed at $49.50. CheckFree stock (Nasdaq: CKFR) rallied big time. The stock leaped $8.57, or 23.27%, ending the trading day at $45.40.

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