Tom Brown: Compucredit a Buy

From: Reuters.

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Tom Brown, who heads the $500 million hedge fund Second Curve Capital, said on that his best investment idea now is CompuCredit Corp., a subprime lender and credit card issuer.

Brown, who is an alumnus of Julian Richardson's Tiger Management hedge fund and who runs the Web site BankStocks.com, said CompuCredit is trading at six times estimates of 2008 earnings, and has $700 million of "excess liquidity" on its balance sheet, which it could use to make acquisitions or buy back stock.

Brown, who only invests in financial stocks, said Capital One Financial Corp. and First Marblehead Corp. are also among his top holdings. Brown said his holdings are giving his three funds "a great year," and added: "We're up over 40 percent in one of our funds."

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