Resource America Unfairly Punished by the Credit Crunch

Since
late July, nearly everything related to the financial sector has been
sold off by panicky investors fearful of finding themselves holding
worthless paper. Securities
that have been particularly hard hit have been those related to the new
alphabet soup of recently invented financial instruments, such as ABS
CDOs CLOs & TruPS. The
firms that hold these securities have been hammered indiscriminately,
while some have gone under those that were well balanced have been left
behind at ridiculously low valuations.

Resource America (REXI) fits squarely into both of these categories. ResourceAmerica’s connection to these troubled securities poses no real balancesheet risk as it is purely an asset manager, collecting only largeamounts of fees that result in a large free cash flow. Theasset management division coupled with the company’s other divisionsmakes the comp