You've liked this stock since January, when it was near 18. Now it's under 10. What gives?
One of the issues in the fleet business is that funding costs are rising faster than vehicle leases are turning over. But only 5% of the leases have any residual-value risk, and the company is a consistent free-cash-flow generator. The main reason the stock went down was people fleeing anything mortgage-related. Yet not all that much has changed, and the stock looks like an incredible bargain.

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From Barron's 6-25-07:

"Pennant Capital Management reiterated its "strong objections" to the company's proposed merger with GE Capital Solutions and Blackstone Group. The investor said it wants PHH to provide shareholders with the information required to understand alternatives to the proposed sale by filing a definitive proxy statement that "alleviates the gaping holes" in the preliminary statement. Pennant Capital currently holds 4,169,800 shares (7.8% of the total outstanding)."

PHH (PHH)
Pennant Capital Management opposes a merger with GE Capital Solutions and Blackstone Group because, it contends, the price doesn't reflect PHH's value. Pennant said the merger isn't in the best interest of the shareholders, and it urged the board to pursue a separation of the company's mortgage and fleet businesses through a spinoff. Pennant holds 4,169,800 shares (7.8% of the total outstanding).

PHH (PHH)
Pennant Capital Management said it opposes the pending acquisition of PHH by General Electric's (GE) Capital Solutions unit. Pennant doesn't believe the $31.50-a-share merger consideration adequately values PHH and it doesn't think the merger is in the best interest of PHH shareholders. Pennant holds 2,689,800 shares (5%).

Downgraded by Friedman Billings from Outperform to Mkt Perform

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