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Guaranty Federal Bancshares Inc. Message Board

  • workallday997 workallday997 Jan 25, 2011 12:00 PM Flag

    Don't Mind the Drop from the Highs

    Sellers came in after the big jump and are still selling it down, I'm actually kind of relieved, I wanted another opportunity to possibly add here. I've looked at many other small regional issues and I have yet to find better value. Every ratio and measure seems to be trending in GFED's favor for the past few quarters, and the recent quarter confirmed it.

    At a book of $13.70, anything under $10 in this economy right now is just too cheap. I'm not surprised this might drop down below $6, many people aren't patient. They can't wait for the big homerun.

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    • getting nice V at my favorite microcap wtt, loved buying lots at big (2-3-4X) discounts to book. I hope the volume is signaling something, buyout at 2-3X book could make sense (big cash pile), turn around after dumping a loosing division (we hopes).

      I love bke too, just hope the trading dynamic remains as has been and we get the shot at sub $30. With 5M of s.i. I think it's still intact.

    • Yeah, I feel about the same way, but I think it's entirely possible that this could trade in the 6-7 dollar range.

      I don't know if I see it having any sustained prices above 7$ until we see some more encouranging results. (like Q1 earnings and how much GFED gets paid on the Gillioz forclosure in April)

      I think if GFED is able to beat earning year over year for a couple of quarters this will probably head up closer to book value, or at least close to the 12.50$ book value it would have if the TARP stock warrants were exercised.

    • Well no $7 is cheap, this will be a $15-$25 stock in the future if I had to predict. I just meant that don't expect for that price to hold up tomorrow. It'll go back in the high $5's if I had to guess.

    • Well, I see what you mean without any doubt, but if it were a market order that made it jump to 7$ that means that NOBODY had a sell order under seven bucks.

      I don't think that paying 7$ is an inflated price from a value perspective, but 15% gains for the day is not typical for any stock unless there is some major catalyst for it.

    • Today's trades: The inflated price is ridicolous, had to be a market order.

      6.85 100 NGS 15:55:23
      6.85 100 NGS 15:55:08
      6.9999 100 NDD 14:19:10
      5.60 325 NYE 13:34:32
      5.75 100 NYE 12:16:59
      5.81 1350 NYE 12:16:59
      5.8101 150 NDD 12:05:32
      5.81 150 NYE 12:05:32
      5.85 100 EDGX 12:04:57
      5.85 550 NYE 12:00:03
      5.85 400 NGS 10:43:53
      5.86 100 NGS 10:43:53

    • I'd say somebody put in a buy order at market price, and there just didn't happen to be anyone selling when they did it.

      Either that or somebody with a big position in the stock is throwing little buy orders in on the stock to try and bid the price up.

      In some ways this has an advantage over BKE because it's got a lot more book value than BKE in relation to share price, and it's a financial stock, so there isn't much of a threat from "brand image" issues. I love BKE stock, but I feel there is more value here at these prices. I'll be buying again on BKE if/when it gets down into the 20's. I actually favor TRLG over BKE at current prices although I like BKE as a company a little better than TRLG.

    • huh, just scanning the portfolio, $7 here, on no volume? Interesting, wish I had the time to try and figure it out, build some conviction.

      (only big thing on my to do list is "buy lots of bke at 29-27-24-etc)

    • If the stock warrants were exercised it would result in about a 17% dilution of share value, but it would give GFED almost 1$ per-share in cash, so at current book value this is worth 13.70$ add the 2.55 million that puts book value at about 14.68$ per-share. After a 17% hit that would put book value at roughly 12.50$. I question whether Uncle Sam will exercise the options if GFED, but at these prices it's priced way under the value of even a worst case scenario.

      My numbers also don't include any increase in shareholder's equity from earnings made going forward from the end of 2010.

    • More selling today, getting to mid $5's now, giving me an opportunity to buy even more soon. I'll take it, as GFED looks tremendously undervalued. I just wish they'd discuss TARP options in the future here, that seems to be the only overhang. I know Sam has mentioned that if they were to issue near book if the stock gets up there in the next few years that it would even things out because it would eliminate the TARP debt at the same time, but I'm still hesitant on that idea just because of the addition of new shares. But who knows, maybe they will be able to pay it in cash by then

    • Thanks, I hope you're doing well with all of your holdings, I'm surprised you did not take a position in GFED yet. Over at the NBBC board, a poster that I respect his opinions (katb) did a preliminary analysis on GFED after I told him to take a look. I then responded with my opinion on his analysis. If anyone has anything to add good or bad feel free, I feel like the more we look for holes the better investments we will make.

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