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Why NewStar Financial Inc. (NEWS) Justifies Contrary Stock Investment Action

Wednesday, July 30th, 2008

The Consumer Financial Services have suffered such ill-repute of late that most stock investors look askance at the industry. Yet, there can be no denying that expenditures on loans are central to any free-market economy. That is why corporations that practice the best business standards in this industry translate into top stock picks.

This corporation from the forward-looking territory of Boston, MA is focused on small enterprises and commercial realty. The company is structured around three business lines, which gives it a lean but most effective organization.

Annual revenue growth on a Trailing Twelve Months basis tops 47%. This is most creditable considering the trying market conditions. The stock price is not far from a 52-week low as July 2008 draws to a close. Yet, business prospects for the near term appear to be most encouraging.

The company has a positive cash flow for the Most Recent Quarter. Net income has turned positive after a loss earlier. This turnaround has been achieved in the face of reduced business volume. Stock investors will get the right signals from this conservative business management approach. Another encouraging development is that the proportion of non-performing assets has come down. The management has shored up its credit lines to protect stocks and the business from the effects of market conditions.

The company is now adequately fortified to withstand turbulence in demands for its financial products. The offerings are sufficiently broad for the corporation to lead the competition once economic prospects brighten.

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