Zacks Blog Cautions on Saxon

Zacks.com, the online unit of Zacks Investment Research Inc., Chicago, has reported a recent posting on its Analyst Blog noting that the company is maintaining its Hold recommendation on Saxon Capital but cautioning about its risks.In the Zacks weblog commentary on Saxon, the analyst said the company had a weak fourth quarter and noted that competition is driving down margins. "We feel that the company will have a difficult time making money in 2006; margins will remain low and production volumes will be stagnant," the analyst said. "On the other hand, the dividend yield is extremely attractive and the company now trades at a significant discount to book value. However, this is a risky stock, and large dividend cuts could come if the mortgage business does not improve in the next year." Saxon, a residential mortgage lender and servicer based in Glen Allen, Va., is a real estate investment trust. Zacks can be found online at http://www.zacks.com.