Forest City Enterprises stock, which in late March had sunk below $4 a share, has more than doubled, closing yesterday at $8.23. That's still well more than 80% below the peak in recent years, but it's a major short-term gain, especially since Morningstar has said the stock is worthless.The comeback did not begin dramatically after the developer released earnings results March 30, but rather picked up steam a little later.
While part of the recovery may be tied to the general rise in the market, it also may reflect new confidence in the company. The Motley Fool reports:
[S]ome of the smartest minds in the business are trolling through the wreckage of this market turmoil and picking up some of the pieces. All-star mutual fund manager Marty Whitman recently added to his position in real estate operating company Forest City Enterprises (NYSE: FCE-A)...
The first quarter letter to shareholders from Whitman's Third Avenue Funds:
Forest City Common and POSCO Common were acquired at prices that seem to reflect deep depression economic conditions. The long-term upside potential for both issues appears to be huge.
Whitman bought additional FCE shares at an estimated average price of $9.20, so he hasn't yet made a killing.
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