Instead of talking about finance institutions that are being diluted like Citigroup (C) - Get Report and financial institutions that are so hot they're already above their November lows like Wells Fargo (WFC) - Get Report and Goldman Sachs (GS) - Get Report, I'm going to introduce you to a better place where it's bottoms up from here.

After getting the wind knocked out of it,

Anthracite Capital

(AHR)

shows signs of life. Granted that the price may have exploded higher from $0.74 by the time you see this article, but let's use that price as a baseline. What do we know about Anthracite at $0.74?

1. Anthracite is trading at a P/E of 0.487 if you knock out the fourth-quarter earnings nightmare and look back one year from the third quarter. The reason I took out the fourth quarter is because the loss claimed appears to be a one-time huge write off, followed by positive earnings the next quarter.

2. Anthracite Capital is trading at a book value of 0.1.

3. Anthracite Capital is traded on the

New York Stock Exchange

. Let me repeat. This is a company cheaper than the listing requirements on the New York Stock Exchange. It either increases in price or eventually gets delisted.

All of these figures indicate that Anthracite is priced for bankruptcy. Where's the good news?

1. They have pushed back the disaster twice already and have been in talks to resolve the issue. If I know anything about creditors, the last thing they want to do is run their debtors into the ground.

2. Anthracite was profitable in the first quarter, just not as profitable as it used to be. If you optimistically flat line the profit figures from the first quarter into the future, your P/E is still 0.685. Note that in the first quarter of 2008, net income attributable to common shareholders was twice as large as any quarter as far back as I can see. So, comparing the first quarter of 2009 to the same period of 2008 isn't fair to begin with. The bottom line here is that comparing first-quarter income for 2009 to Anthracite's history, then things match up but the revenues are weaker.

So, what am I doing about it? I'm buying. I probably already have a sizeable position. I'd say you could add this to my suggestions for 100% in 1 month, but that would be an understatement. I'd be surprised if AHR didn't see $2 by June 18th.

Disclosure: Glen Bradford and his investors own shares of Anthracite and Citigroup.

Glen Bradford owns shares of Anthracite and Citigroup. Bradford is a Purdue Industrial Engineer pursuing his MBA and trading his entire tuition in the stock market as well as the tuition of his roomate. His life goals are to efficiently allocate capital: mental, physical, financial, emotional.