Sick of hearing people run their mouths about how good management is and how they are creating growth for the future. How many quarters are we going to say that after wasting cash on more ridiculous small acquisitions that bring next to nothing to our bottom line?
I posted the comment below on another thread when someone commented about the great job management has been doing. That statement is laughable.
Great job management? Are you serious? Tell me you are kidding? This stock is a POS. Until "management" does something worthwhile with that pile of cash, the stock will continue to drift. Bank earns peanuts and keeps shelling out money for small worthless acquisitions. No other way to look at it. Long term value? Yeah, take a look at a five year chart. This may have been a long term value play 10 or 15 years ago, but PBCT has been dead money for a while.
The stock is in a freefall, especially for the people who bought it at $20 a share. The Board appoints an operations guy to run the Bank. His allegiance is to Chittendon. He doesn't even have a permanent residence in CT.
PBCT needs experienced leadership who know what to do to prop up the stock's value and move the Bank in a positive direction.
My inclination is that the Bank leadership is sitting back waiting for the company to be bought. Now that the stock is at less than $13 a share, the bank is a ripe for takeover. With senior management owning significant amounts of PBCT stock (given to them) they stand to make a bundle of money no matter what the shares are sold for.
Buy PUT Options.
A terrible stock that pays over 4.5% dividend while waiting for a turnaround in a state where real estate foreclosures are out of sight and business is moving out of state and the ecomic climate is one of the worst in the country. Considering all that, I think they are doing pretty good and chosen by CT Magazine as one of the best 23 companies in CT to work for. They have seen the worst and the stock will not skyrocket but it will outperform the market for total return (Appreciation + dividend)
Don't you get it yet. You are not "being paid to wait." The money that pays the dividend does not come from earnings, it comes from PBCT capital on hand. You buy the stock, you buy that capital. They send you some of the money that you bought every three months, you pay capital gain tax on the money you gave them when they give back to you. That is not "being paid" it is being had.
Danger here. Their payout ratio is 260%!!! They are paying out capital in dividends. Will that continue? I sure don't know but it's so unusual I wouldn't count on it. They should use the capital to make a meaningful bank acquisition, and not some crappy little finance company. Or, they themselves may soon be eaten by some larger regional and then they'll be put out of their misery anyway.
I am beginning to think that the best thing that could happen is for this bank to be taken over by another bank.Management appears to be timed and unable to make use of the assets they control.Maybe it needs a new board?
looks to me like the stock market is discounting the PBCT dividend since the core earnings don't justify any dividends except a few cents.
Long term it really depends whether PBCT can compete and really run a competitive bank. Both the real estate market (residential and commercial) and business lending look like they are going to be very weak for next 3-5 years. How well you manage--cost controls, strategic opportunities, etc are key. PBCT has the cash but I am not sure if they have then management to execute.
It is an intersting stock BUT the stock price weakness would indicate that insiders and the smart money see more downside risk than upside earnings surprises.
How is expansion on long island a bad thing. I would think a recovery would occur there quicker than most markets. Should they go out and buy up bad investments, rather than smaller ones?