Talk about a great business. Talk about a confusing and awful business name that few investors follow.

I was turned on to this stock from bankstocks.com founder Tom Brown. This site knows financial stock investing and has been on my blogroll for a while now.

Tom and company have totally nailed First Marblehead (FMD) and they see more of the same for ‘Da Marble’:

“Non-Bank” of the Year: Remember, at this time last year, when First Marblehead’s business was by common consent destined to eventually wither away to nothing? The company’s banking partners were just sure to bring their education lending business in-house, the thinking went, and cut Marblehead out of the process completely. And any partners Marblehead did manage to hang on to would inevitably negotiate themselves better deals, and squash the company’s profit margins to nearly nothing. Remember? Twelve months later, that dour consensus has turned out to be 180-degrees wrong. The company has signed up 19 new lending partners from 2005 through 2006, including some major education lenders, such as KeyCorp., that had previously gone it alone. Its relationships with its two largest partners, Bank of America and J.P. Morgan Chase, appear to be stronger than ever. Meanwhile, margins have gone up, not down. It all adds up to yet another year of sizzling financial performance. Marblehead’s earnings per share are set to rise by roughly 50% in fiscal (June) 2007, on top of a 54% rise in 2006, and a 100% rise the year before that. I don’t know of many other financial services companies that have as potent a competitive advantage as First Marblehead does, or that have been as adept on converting that advantage into concrete value for shareholders. The stock price rose a hearty 149% in 2006 off of deeply depressed levels at year-end 2005.

It is definately Wallstrip worthy and Lindsay and crew do a great job explaining their dominant position in a great business.

This should be on long-term investor radar screens to have in weakness and in strength ’till governement do you part’ :) .

For a deeper look at the technicals and possible entry points check out Brian’s analysis below:

Go Marble, Go Marble…

Disclosure – No positions but on my radar screen for a few shares