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Strategies & Market Trends : Dino's Bar & Grill

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To: Goose94 who wrote (59508)	5/28/2019 8:37:21 AM
From: Goose94	Read Replies (2) of 202922

Home Capital Group (HCG-T) M Partners analyst Andrew Hood says Home Capital Group has emerged from its 2017 difficulties on a "strong footing" with sufficient liquidity and reduced exposure to demand deposits. Mr. Hood began coverage on Home Capital with a "buy" rating ad $25 share target. Analysts on average target the shares at $19.75. Mr. Hood says in a note: "We believe HCG can continue to originate above the average growth rate. ... Home Capital Group has traded at a steep discount to peers, and below its book value, since 2017. We believe this discount is no longer warranted, and as ROE grows we anticipate a rerating in the market. Even at its current ROE, the P/B is lower than justified based on the historical relationship between P/B and ROE. We expect book value to continue to rise, with the share price compounded by a rerating on the P/B multiple. If shares continue to trade below book value, we believe there is opportunity for a strategic buyer to purchase the company at a substantial discount. Looking at precedent transactions, a transaction would likely create significant value for existing shareholders."

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