The Fear Basket

ACF- A independent auto finance firm. Using a proprietary screening system, ACF issues, services, recovers, and securitizes auto loans. Leucadia National has built a 25% stake in the company over the past year even though ACF has had two unprofitable quarters. The company plans to tighten lending and cut costs.
Normally, ACF trades at 1.5x Book Value. If the company reaches a BV of $20 over the next three years the price could reach $25, which equates to a 25% annualized return.
Current Price- $13
Dividend- 0%
Book Value- $17

PRAA- A collections agency. PRAA purchases charged-off portfolios of assets from other parties for pennies on the dollar and then collects. The business is simple but filled with regulatory issues concerning harassment. PRAA hasn't had an unprofitable quarter in years and sported a ROE over 17% for the past 8 years. The current environment should offer PRAA some opportunities to buy charge-offs at lower than average prices.
Current Price- $34
Dividend- 0%
Book Value- $15

RWT - A mortgage REIT. Much of the income is derived from packaging and selling securitized debt obligations; a scary place to invest. RWT also barrows money against some of its loans to raise capital, however, it recently sold$122 million in additional stock to opportunistically buy distressed CDO's and other debt. The securitization market is frozen so income will drop; add the greater dilution and you will have some good buying opportunities in the next few months. When the price drops, the monthly yield (obviously) rises.
Current Price- $35
Dividend- 8%
Book Value- $5

CCRT - A subprime mini conglomerate. Operations include limited credit cards for unbanked customers, auto sales/loans, microlending, and a collections agency that collects for both CCRT's portfolio and portfolios purchased at a discount from banks. Management own 60% of the company and they quote Buffett often in the Annuals. Recently, CCRT has discontinued some 105 unprofitable and marginal pay-day loan store fronts. Cash flow has been poor recently but when the economy turns, the price should meet and surpass book value.
CCRT has regularly traded at twice book value. If book grows to $20 in three years and the price rises to approx. $25 then you have a 35% annual return.
Current Price- $9.50
Dividend- 0%
Book Value- $14.50