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Bank of the Ozarks, Inc. Message Board

  • curiousinvestor71 curiousinvestor71 Feb 11, 2010 9:57 PM Flag

    Why is this stock shorted so much?

    Short squeeze reports around 27% shorted. That is shockingly high...one of the highest. Anyone know why?

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    • A few things--keep in mind, today is the first time I've ever heard of this bank.

      What drew me to it was the earning report today. 3Q seems to be perfectly fine, too fine for the pit we are in. Intrigued, I looked at the price to book value. Alas, we are paying more than twice the book value! The share prices fully reflects the superior earning power and growth record of this bank.

      Somewhat discouraged, I looked at the past eight years. Indeed, it was a stellar performer all along. But I can't seem to pin point how it consistently loan out at such high interest rate without sacrificing loan quality. (More digging is required.) The funding cost is usually high due to heavy dependency of brokered loans, but even during the darkest days--Spring of 2009--it did not seem to affect the overall funding. (To its credit, leverage was maintained at around 10%.)

      Loan portfolio did not appear to be a problem until popping up in2Q10, but then it could be caused by the acquisition in 1Q. (More digging is required.)

      IF the shorts see this as a weakness, it does not surprise me that short interest would be so high, due to it's high PB and apparent weakness in the economy.

      I remain interested as a possible long. However, I too have to justify paying twice the book value. Cheers.

    • 5 year mortages reset in spring .Wonder how many they have on the books?Their could be alot of defaults by homeowners stuck in higher rates .Damm I hope not.All I know is that I saw this stock featured on stock shorts .com.Has a very high squeezing rate if it starts moving higher this stock could sky rocket

    • I wonder the same thing? It must have to do with their loan portfolio.

      I wonder if the shorts listened to the 3rd qtr conference call where mgmt said the worst was behind them and the 4th qtr results confirmed this.

      These guys do all of their own underwriting and did not engage in large amount of proprietary trading - clean commercial bank in one of the more insulated regions.

      I am baffled as well

 
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