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Strategies & Market Trends : Value Investing
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To: 56Chevy who wrote (52502)10/15/2013 10:58:42 AM
From: Paul Senior1 Recommendation

Recommended By
Jurgis Bekepuris

  Read Replies (1) of 78742
 
I'll pass on this one also. CFIS could work out very well for you though.

For me, I see that the bank is dinky and unprofitable and has sold for less than 1/2 stated bv since '08. I'm just not interested at this time in buying in to hold on to such company primarily on the expectation that the bank will be taken over.

If the bank is acquired, I have difficulty believing anyone would have to pay more than 1/2 bv to get it. (That'd still be a good gain for stock holders though --- $1.10 going to 50% of $2.97). Otoh, stated bv has fallen every year the past five. If a takeover doesn't occur soon, then stated bv may be lower next year than now. If the bank is in midst of a recovery, then maybe bv stabilizes and also bank is worth more to an acquirer. I don't know enough to ascertain that the bank is now in a sustainable recovery period. If you believe the recovery, then of course that leads you to more confidence that you are correct that an investment is warranted.
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