I mainly invest in stocks that I find using quantitative rankings. But sometimes I read about a really compelling idea from someone else. One of these ideas has been posted by anonymous Twitter user @dirtcheapstocks here and here. This particular idea is about certain American community banks. These banks will get or have already got a capital increase through selling preferred shares to the US federal government. What is special is that, in my opinion, these preferred shares are worth much less than their book value. Reasons are that these prefs are perpetual, have low interest rates (at most 2%) and are non-cumulative. They might be worth as little as 10% of their book value but to be conservative I use 20% of book value for my analysis below.
I think you have the wrong tangible book value for the common for UBAB. Tangible book value was about $80mm before ECIP and now $198mm after. It says $55.27 tangible book value now on seekingalpha. So maybe .64 p/b. I had to double check this one because this company seemed to have a decent long term business with good management. About 20% EPS growth for 10 years on the back of 6% revenue per share growth. NIM is above 3.65%. Their historical p/b has been about 1. Their ROE for the last 4 years has been between 13% to 24%. Forward compounding returns might imply mid 20's% for many years and this stock could be held long term(imo from initial research).
I think you have the wrong tangible book value for the common for UBAB. Tangible book value was about $80mm before ECIP and now $198mm after. It says $55.27 tangible book value now on seekingalpha. So maybe .64 p/b. I had to double check this one because this company seemed to have a decent long term business with good management. About 20% EPS growth for 10 years on the back of 6% revenue per share growth. NIM is above 3.65%. Their historical p/b has been about 1. Their ROE for the last 4 years has been between 13% to 24%. Forward compounding returns might imply mid 20's% for many years and this stock could be held long term(imo from initial research).
SFDL is the code and not SFD