T2 Partners books profits on Wells Fargo, Amex

NEW YORK, May 20 (Reuters) - Hedge fund T2 Partners LLC is selling financial stocks that have soared since March, expecting the fallout from the mortgage crisis will produce more losses for banks, founder Whitney Tilson said this week.

Among positions pared are Wells Fargo & Co (WFC.N) and American Express Co (AXP.N), Tilson said in a recent interview. Shares of both companies have more than doubled since early March, along with other financials amid speculation that the grip of the U.S. recession was easing.

"There's not as much margin of safety" in share prices, Tilson said. "We are positioning the portfolio much more conservatively, (but) we are not predicting things are going to completely crash from here" Full story: [ID:nN19409951]

At the same time, Tilson has added Bank of America Corp (BAC.N) to his short positions, which benefit if the stock price falls. Bank of America, he says, "has a much worse position" than Wells Fargo and American Express and will outperform the two, of which he'll retain some holdings.

Tilson said he and partner Glenn Tongue are shorting MBIA Inc (MBI.N), the bond insurer that they write in their new book "More Mortgage Meltdown" is woefully underreserved and may not survive the year.

Tilson is also shorting homebuilders whose shares have bounced, such as Centex Corp (CTX.N) and Pulte Homes Inc (PHM.N).

Tilson also likes microcap Resource America Inc (REXI.O), a specialty finance company that he wrote is a bargain after its "complete disaster" over the past two years. (Reporting by Al Yoon; Editing by Padraic Cassidy)