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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (42338)	4/21/2011 1:39:12 AM
From: Spekulatius	Read Replies (1) of 78974

Hedged some of my long exposure with an SPY short position at the close. I'd rather be short IWM (Russel 200 ETF) but can't get any borrow - how can this be with a super liquid security like IWM? MCHB announced earnings after the close to day - 3.8M$ in Q1 2011 earnings which translates into 200$/share, about flat with last quarter. Tangible equity is about 14800$/share and in addition they run a wealth management operation with 1.345B$ in assets under management. Take a very conservative 2% of that as a value estimate and this another 27M$ or ~140$/share in implied value. Apparently these guys don't care about splits. Back in Y2007, this bank made ~1500$/share in earnings and in a "normalized" environment, they should get this earnings power back, since they did not incur any dilution during the credit crisis. they have plenty of capacity in increase lending with ~900M$ in cash and short term investments on their book and an ~15% Tier one ratio. I probably would not have bought this if this bank were not local. It might take some patience for this to play out.

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