In my opinion RHG should be trading flat or down based on the company's hostile response to the Intelligent Investor proposal, not gapping up. Basically the board has announced that it will manage the company as it sees fit and that it is going to resist attempts to change course.
I'm also pretty surprised that the RHG shares did not trade down significantly after the last results announcement. They have been forced to buy back a very large amount of mortgages that are in active default/delay. That is a HUGE change in the risk profile of the company's assets versus a pure runoff of cash, which is what we had prior to this last release.
The question the market should be asking is does that trend continue and get worse with each successive release.
I'm also surprised by the lack of general volatility in the shares considering that this is runoff situation with high risk given the resistance of management to paying dividends.
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