I do some research and these are what I have:
1. According to biz.yahoo.com, book value
of ESX is $14.66 and Cash value is $14.70. That is because ESX has
$15,517,267 as capital in excess of par.
2. According to: sec.gov
(one can find this link under "raw SEC filing" in yahoo, ESX, profile)
I quote:
"SHAREHOLDERS' EQUITY
Series B preferred stock, $.01 par value:
Authorized shares--2,250,000
Series C preferred stock, $.01 par value:
Authorized shares--125,000
Common stock, $.01 par value:
Authorized shares--10,000,000
Issued and outstanding shares--1,057,193 in 1997 and 1,053,379 in 1996"
So, ESX has 2,375,000 prefered shares and 1,057,193 common shares.
Well, we take $15,517,264/1,057,193 shares then we should get the book
value.
BUT...(on page 15 of 33 page 10Q Report) I found:
"Earnings per share ("EPS") is computed based upon income adjusted for
preferred stock dividends, divided by the average number of common shares outstanding." and
"Total shareholders' equity at June 30, 1997 was $15.5 million. However, the Series B and Series C preferred stock has a stated value and liquidation preference of $15.0 million, exclusive of cumulative but undeclared dividends and accrued interest thereon of $2.6 million at June 30, 1997. To the extent that EBI's income is not sufficient to cover the cumulative dividends and accrued interest on the Series B and C preferred stock, the equity of EBI's common shareholders will be affected."
SO, it means that $17.6 millions is belonged to SeriesB and SeriesC
prefered shares, THAT MEANS COMMON SHARES HAVE NO BOOK VALUE AT ALL.
(Please correct me if I am wrong).
3. On page 29/33 of 10Q report, I also found that "By December 31, 1996, after completing the sale of nine of the Bank's retail bank branches during 1996, EBI's total assets had been reduced to
$174.3 million. By June 30, 1997, EBI's total assets had grown to $190.1 million." ESX now has only 4 branches left (3 in Virginia
and 1 in North Caroline). ESX is NOT growing, ESX is consolidate
to survive.
If one reads more on 10Q report , one can find that ESX has some
bad and delinquency loan.
Conclusion:
- One can not value ESX based on book value, because the cash is
belonged to Prefered Shares, common shares has NEGATIVE BOOK VALUE.
- The bank is not growing. In fact it has to sell branches in order
to survive.
- 5 year high $4.50 and low $1.00, why now it went from $2.00 to $8.00 ?
The only answer I can come up with is: somehow someone missed the
real book value and think ESX is at a discount.
At $2.00 per shares, the 4 branches worth 2 millions dollar plus.
That is about right. |
