Hi everyone,
Since working for this small-cap equity research shop, I've been fascinated with thrift/community banks, particularly ones that have gone through conversions. The value proposition behind them seems so obvious (many trade below tangible BV) and they're often underfollowed.
Does anyone know other industries/sectors where the value proposition is presented as obviously as mutual thrift conversions? Thanks!
Can you elaborate on this "obvious" value proposition? Is it just the observation that they trade below BV?
Good question. To further add, I would also say that the risks are more focused and easier to track. Most thrift/community banks operate in specific regions, which allow you to have a stronger grasp of its market area and the state of the industries that drive the financial health of those regions. You can also gauge management's appetite for risk based on loan composition and trends in credit quality ratios.
I would also add that due to their small size, lack of coverage, and small volume that the conversion processes for these banks are typically underfollowed, which allows for the presence of the opportunity
What is a conversion process? I don't follow these companies.
What are the drivers of growth for these businesses? Are they mispriced, and if they are, why? What are catalysts that will realize the fair price? You need to be more clear on your investment proposition.
What is a conversion process? I don't follow these companies.
What are the drivers of growth for these businesses? Are they mispriced, and if they are, why? What are catalysts that will realize the fair price? You need to be more clear on your investment proposition.
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