Buying on bad news is tough to do but this stock looks like it has been kicked around plenty and might be a good bet. IndyMac Bancorp (NYSE: IMB) is trading under a new symbol this morning, (formerly 'NDE'), reported earnings down 34% in its most recent quarter. It also gave a pessimistic outlook for its second quarter earnings.

The housing market sucks big-time and a recovery is not in sight. It is also suffering due to guilt by association with the sub-prime lending shadow which has been cast far and wide. To make matters even more dismal I was informed by two of my brokers that the short interest in IndyMac has been building all year and now stands at approximately 35% of outstanding shares, a substantial amount. Might be time to pass the ant-acid's around the room for any queasy folks out there.

Well if the key to the stock market is to buy low and sell high, I thought I would bring IndyMac to readers' attention and share what I see as a potential opportunity. The most startling thing about the stock fundamentals and something I do not ever remember seeing before, is that at yesterday's closing price of $30.24, the trailing P/E was 6.41 and the dividend yield was 6.46% - YES THAT'S RIGHT -- the Yield is higher than the P/E ratio! That's unbelievable!

So not to be foolish I immediately started checking IMB's credit-worthiness, could it cover? Moody's, Fitch, Standard & Poors, and Dunn & Bradstreet all rate the company as stable and give it a BBB from last June through the most recent by Fitch as of April 2007. The bank started in 1985 and seems like it will be fine over the long haul.