It's hard to find a true comparison, as they have full service and discount online brokerage, market making, clearing, and a technological piece (CSS), so I really do feel it's unique in its field. Unique and mostly unknown.
Did a quick screen of SWS vs. SCH, NITE, MER, RJF, AGE. On a P/BV basis, it's lower than all at 1.2 times (it's about 2 times if you back out the NITE holdings, still only slightly higher than AGE and RJF, which I'd guess you refer to as super-regionals). Growth, per Yahoo, is projected to be at 15% over the next 5 years. With limited analyst coverage, and the last earnings report being what it was, I would think the company could match or exceed the growth rate of a NITE or SCH, which are projected to be 25% and 22%, respectively. These two trade at much higher multiples than SWS.
So that's my thesis for the value in SWS. One could be disillusioned with management for not getting this story out, or happy that they are tending to operations. |
