FC is a small company at a $345M market cap that pays a nice yield of 9.5%. Earnings are expected to rise decently in the coming years, and its free cash flows have risen nicely over the past several years, but are mostly used to pay dividends. Its balance sheet is OK and its valuation has been contracting over the past year, with a price to book of less than 1.0 now. We feel this is largely reflective of the current interest rate and housing environment. The recent price action is not great, but its free cash flows are more than enough to pay its dividends and its debt levels are healthy. We think it looks cheap here, and it's a profitable company that can service its debt and dividend payments. If its fundamentals begin to deteriorate, our views might change, but so far its fundamentals have held up fairly well, it pays a good yield, and is trading below book mainly on the current interest rate environment. We do not feel that these valuations will persist forever.
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