1stPlus Gets 'Strong Buy' Recommendation

Chatfield Dean & Co. Inc., Greenwood Village, Colo., has initiated coverage on the Dallas-based FirstPlus Financial Group Inc. with a "strong buy" recommendation.The firm recommended buying FirstPlus stock until it reaches $28, assuming the company has not been bought, and said the stock could trade at $41.50 within a year. Chatfield Dean cited various factors contributing to its recommendation, including FirstPlus's market leadership in retail debt consolidation lending, delinquencies and defaults that are "consistent with expectations," and the company's search for a buyer. The firm noted that FirstPlus has alleged market manipulation of its stock by short sellers. "We speculate [that] institutional investors have reached their limit in the stock and are therefore unable to stem short selling activity," Chatfield Dean said. "This represents an excellent opportunity for the individual investor to capitalize on the undervalued shares." Risk factors cited by Chatfield Dean include the facts that: there are no assurances that FirstPlus will be bought or that there will be a loan securitization in the current quarter; default and delinquency rates may exceed expectations; and demand for retail loan originations could be adversely affected by interest rate fluctuations. Chatfield Dean's website address is http://www.chatfield.com.