This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Seeking Alpha Issued A Report On Manhattan Bridge Capital

I think an investment in LOAN is a win-win, regardless of economic conditions. That is because their stock price tends to move in the opposite direction of their fundamentals. During good economic times their business does bad because it cannot find enough high quality people to lend to due to competition. Yet, their stock price always rises in these periods, and typically sells at a premium to book value. Conversely, the company does great during bad times when nobody but they are lending, and yet their stock always gets hammered along with the broad market. During the bottom last year, LOAN was selling for 25 cents on the dollar to their loan portfolio minus all liabilities. With such a discount to book value, you'd think they would be struggling, but instead they were making money hand over fist as high quality borrowers had nowhere else to turn to for loans.

So if the economy continues to improve and credit eases further, LOAN may struggle again, but their stock price will likely rise to meet book value as it has in the past, producing gains for the investor. If the economy weakens and credit tightens again, the stock price may once again dip but Manhattan Bridge will flourish once again, increasing their intrinsic value.

Added to a basket of net-nets or cigar butts, I believe LOAN makes a great investment. The low risk profile of this pick makes it very possible that Ben Graham would have owned this stock if he was managing his little partnership today.

*A word about liquidity. With just $10,000 worth of shares exchanged on average day, liquidity is low. However, even someone with a 7 figure portfolio can establish/exit a small position if one takes a few days or even a week to patiently buy/sell. I hate it when people whine about low liquidity in these stocks, you cannot expect great liquidity in net-nets. It comes with the territory. If they had great liquidity they probably wouldn't be this cheap to begin with. If you're scared of liquidity, you probably should not be investing in these types of stocks. You will not find any liquid, billion dollar stocks selling for 2/3 of their net current asset value.

3 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs