Wescorp is a Savings and Loan company focused on Mortgage and Auto loans. They have been expanding rapidly and control a significant portion of auto loans. They seem to focus on used cars.
The thing I like about this company is they are more than 60% owned by the CEO and he seems very interested in seeing the company grow quickly, but safely. Since he bought his shares and became CEO, he seems to have done a good job of turning a profit and setting and meeting a long term expansion goal.
There are 2 companies involved; Wescorp and Western Financial Savings Inc or WFSI. Wescorp owns about 87% of WFSI, so the 2 companies are very linked, but they don't seem to trade in step. Often, WFSI sells down ahead of WES making WFSI a better vehicle for speculation when the share price is at a low.
I think lower interest rates and the number of used cars coming on market from lease expiration will drive earnings this year. With a market area of California and expanding sales throughout the Southwest, this company seems to be positioned well.
Last quarter, loan loss provision was raised and they said they had been more strict on loan qualification. This hurt the share price considerably. WFSI traded down to a low of about 8 and then back to 20 and again traded down to 9. Last time I looked I book value on WFSI was around $8.50.
Now, the share price seems ready to go back up. I bought at 9 1/4 Friday 2/6 and 3 trading days later, we hit a high of 13 before settling back to 11 1/4. Having a small public share float, these companies are very volital.
I think these shares represent good value. I'd appreciate any comment.
Regards,
Mark Oliver |
