Zacks Analyst Interview Highlights: MBIA, Berkshire Hathaway and Ambac

CHICAGO--(BUSINESS WIRE)--Zacks.com releases the latest Analyst Interview. Today’s interview is with senior analyst Eric Rothmann, who discusses MBIA (NYSE: MBI), Berkshire Hathaway (NYSE: BRK.A) and Ambac (NYSE: ABK).

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Have you posted any noteworthy Buy or Sell reports lately?

Recently, MBIA (NYSE: MBI) reported first quarter earnings, which were substantially worse than our estimate for a loss of $0.30 per share [-$3.01 per share]. The bulk of the loss came through the unrealized pretax loss of $3.6 billion on the company’s credit derivative portfolio and CDO.

The dreaded CDO claims another victim, right?

Well, but the company also experienced a 43.1% drop in net premium written, and the entry of Berkshire Hathaway (NYSE: BRK-A) will further intensify the competition. Though the company has managed to hold on to its AAA credit rating with a negative outlook, we remain concerned for further rating downgrade. Also, continued concerns for further deterioration in the mortgage markets should not bode well for results over the next several quarters. Therefore, given the continued uncertainty for the group, we maintain a Sell rating.

What was the latest insurer you issued a report on?

That would be Ambac (NYSE: ABK). 1Q08 operating results were a negative $6.93 per share, due to non-cash, mark-to-market losses on its credit derivative exposures of $1.7 billion pretax. The company has taken steps to rectify its issues, which included raising capital, business restructuring and further reduction of dividend, to support the balance sheet and regain its AAA rating.

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