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Special Situation: AMAF

Wall Street Journal Cites 39% Increase Year to Date in Reverse Mortgage Sales Nationwide...(AMAF)

For the Full Profile Please Visit: http://www.smallcapreview.com/amaf.htm

As we detail Amstar??™s future business expectations, investors should take note of one what may very well be one of the best opportunities in the current micro cap market. AMAF's stock price has dropped approximately 40% since mid-November after the company announced third quarter revenues were $2.43 million against projected revenue of $2.5 million. We feel the market has strongly overreacted in that the Company missed revenue estimates by 2% but in reality Actual Revenues Were Up 27% versus the same period a year ago.

We think what should have been viewed as a quarter of improvement in light of the expenses associated with the new platforms installed was instead viewed as a negative because of a 2% shortfall in estimated revenue while disregarding the positive 27% growth in actual revenue. Thus we feel the ensuing sell-off was unwarranted and produces an excellent buying opportunity for those that thought the AMAF train had left them behind. In addition, the Company's revenues are up 34% through 9/30/03 compared to the prior year. If that's not enough, AMAF also reported year to date 2003 earnings improvement of $991,465 as of 9/30/03.

AMAF has been in operation since 1990, with its key operating businesses dating back to 1985. It went public in 1998, and since then has grown from $50 million in loan production to the neighborhood of $450 million in 2003. It has gone from one core business (retail loan production) to a balanced mix of retail and wholesale production, with a secondary marketing effort for additional revenue. It has been profitable four out of the past five quarters, and expects to report a significant earnings improvement for the full year to end 12/31/03. 

Management focuses on the business and is quick to adjust and react to changing market conditions. If you are looking for a small cap stock with an established business, a growth strategy that recognizes market volatility and has profits as its primary focus, then take a close look at this little gem. In our opinion AMAF has reached a floor at $0.14 and may be poised for a break out as its new platforms put it on the fast track to growth in equity and earnings. 

Incorporated in 1990 and consisting of older more established mortgage companies acquired systematically between 1998 and 2002, AMAF??™s primary focus is on developing a regional delivery system for mortgage related products and services. For the past five years, AMAF has experienced strong growth in loan production, with its 2003 numbers expected to approach $450 million, an 800% increase over 1998 when the Company first went public. The Company has grown from one office in Florida to 10 locations in 5 states. AMAF currently has over 80 employees and many additional correspondents. The Company has reported GAAP profits in four out of the last five quarters. These results should be credited toward consistent and singular focus to moving the Company into consistent profitability.

There are three primary business platforms, and all are either operating or in the final stages of execution. AMAF operates a major traditional retail mortgage platform under the name Jupiter Mortgage Corporation. AMAF operates a specialty reverse mortgage operation for consumers 62 and older, under the name America??™s Senior Financial Services. AMAF also operates a wholesale business under the name Synergy Mortgage Solutions. Lastly, AMAF is planning to implement a Branch Partners strategy to be called Amstar Mortgage Network. The latter is dependant upon receipt of financing, which the Company has been diligently pursuing from an Institutional Investor.

Management is strong and essentially consists of the founders of the underlying business units. Nelson Locke is the CEO and the original founder of AMAF. He is currently the President of one of the nations largest Trade Groups, and helped found the Reverse Mortgage Lenders Association. Charles Kluck joined the Company in 1998 and supervises elements of both retail and wholesale. Michael Buono is the Company??™s operating analyst and secondary marketing executive, and currently reports directly to the Board regarding recommendations for improving results at all levels of the business. The Company has one outside director who has been with them since 1997, and has plans to add another in the first quarter of 2004. Overall, AMAF has consistency in management and the principals are vested in the success of the plan.

AMAF plans to continue its growth through three strategies. However, AMAF seems as intent on bottom line improvement as it is on top line revenue growth.

First, the Company has certain retail acquisition candidates under analysis and during 2003 executed preliminary expressions of intent to acquire their businesses. In order to complete these acquisitions the Company needs to be adequately funded. While the Company has funding negotiations underway, there can be no assurances given regarding if or when they will be concluded. If they are, the acquisitions could add several hundred million dollars in new loan production to the Company??™s results.

Second, the Company continues to develop its wholesale and Branch Partners initiatives. Initially, the approach to these two platforms was somewhat traditional. The Company is currently moving in the direction of a "virtual wholesale" platform, which would create bottom line expense savings in excess of $250,000 a year.

Third, with the proper loan production volume and the proper capitalization, AMAF plans to execute a bulk sales strategy that could contribute significantly to the earnings of the Company. In 2003, the Company ventured into the bulk sales arena but was unable to maximize its efforts. In 2004, with the proper funding, the Company estimates that it could take up to 25% of its total loan production to the secondary markets through bulk sales. This would make a significant contribution to earnings. There can be no assurances given as to when this effort can become operational as it is dependent on the Company??™s receipt of adequate financing. Plans are underway to secure such financing.

To view the full profile, including recent press releases and chart for AMAF please visit http://www.smallcapreview.com/amaf.htm

Disclaimer

SmallCapReview.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. For continuing coverage of  AMAF please sign up for our free newsletter, SmallCapReview.com News. Information contained in this report was extracted from current documents filed with the SEC, the Company website and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our website. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. This is an advertisement for the above mentioned companies. The purpose of this advertisement, like any advertising, is to provide coverage and awareness for the above mentioned companies. The information provided in this advertisement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country. 

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