Municipal Mortgage and Equity, Inc. (PINK:MMAB) Breaks Through $1 as Insider Buying Continues

Things are starting to look amazingly cheerful for the stock of Municipal Mortgage and Equity, Inc. (PINK:MMAB) as the company broke through the $1 level wit lively buying volumes. At the beginning of the year, MMAB went up with marked activity and we warned about extremely active insider trading. Let’s see if the latest long rising trend may not end in a cliff drop.

The insider buying continued throughout January and February, at prices ranging from 64 to 79 cents. The last deal is from February 26th. While the amounts are low, the buyers may be certainly benefitting from the gradual rise. Otherwise, the company holds the following fundamental financial strengths and weaknesses:

• $25 million cash

• $13.4 million net loss

• $25 million revenue

• $1 billion debt, of which $14 million derivative liabilities

It is easily seen that MMAB is a large, risk-taking mortgage company, actually listed as lower-risk OTC on the OTC markets website. So far, MMAB has not been promoted, and the only notification to a more general public of investors comes from several filings, reposted on well-read news websites. This may add to the hype, and lift the price further.

In the past three years, peaks above 50 cents were rarely seen, and the current dollar price is stratospheric. The stable daily trade means enough support for the trend, and despite the crisis, MMAB is still considered a more stable bid compared to other penny stock companies. The company is capped at $44 million, with above 40 million shares outstanding, which means its $1 levels may be vulnerable to sell-offs, but it is unknown if the correction would wipe out the ticker to nothing. MMAB has rarely sunk under 20 cents, a respectable floor for a penny stock.

While with hindsight some small cap stocks turn out to be underpriced treasures, still the warning to estimate your own acceptable loss applies. Currently, another ticker is being promoted as a well-run company with longer-term upside potential, as opposed to sub-penny one-day wonders. Premier Holdings, Corp. (OTC:PRHL) is touted right now as a stable and promising ticker, yet the bigger popularity actually causes less stability as some investors cash in quickly.

For MMAB, the highest daily selling volume was 2 million shares in a single day in 2011, but such an event has not happened in a long while. The heavy hoard of inside shares seems to stay put, with only insignificant selling so far. The total of shares held by insiders is 4.85 million.