United has been my hometown bank for some time. I also happen to be an investor who has had more than a few thrift investments in his portfolio for years. My family and I are large holders of this bank (and becoming increasingly more so as we bought plenty more late Friday at the new lows).
I think United will be a very good 3-4 year investment. The bank has always been well run, and Mr. Collins (CEO) will know what to do with this MHC structure.
With buybacks, dividends, and a second stage in 3-4 years, it doesn't take heroic projections to annualize 15%-20% returns. None of us know where thrifts will be trading the day United announces they are fully converting, but it's a reasonable bet to assume they will convert somewhere around book value. At that valuation, this company is a winner...and it also won't trade there for long if thrift valuations are close to where they are today. With a conservative 5% deposit premium and a second stage on schedule, this one qualifies as more than a very decent bet.
It closed at $11.11 on Friday. Four years from today, I will be surprised of the price is not above $20/share. I'll still be around then, so hold me to it!
I ran across United recently and saw your post here.
"I also happen to be an investor who has had more than a few thrift investments in his portfolio for years."
Now there is an understatement.
JJR, I haven't been into thrift investing, so let me ask a few questions.
What is a "second stage"? Why do you mention buybacks, as United just went public? When do you think United will institue a dividend?
BTW, still holding all of my ACAS shares. I'm not sure if I ever had the opportunity to say a proper "thank you" for your patience and willingness to educate a newbie like me (an others) in the spring of 1999 on the yahoo board. So, THANK YOU.
Just bought PSEC at under NAV and loaded up on ARCC at just above NAV.
My apologies to the board for the BDC talk, but JJR will know what I'm talking about.
I'm just starting to look at United. I will post if I take a position.
I apologize for not getting back to you sooner, but after my first Yahoo post in years, I haven't come back to this message board since. This form communication is instantaneous, but it's worse than the Pony Express when you aren't paying attention!
"When do you think United will institute a dividend?"
I have no doubt it will be next year, probably early in the year.
"Why do you mention buybacks, as United just went public?"
Newly converted thrifts are allowed to buy back shares a year after their offering. They can buy earlier for their benefit plans, but the buybacks get interesting after year one. I know it sounds silly to buy in shares aggressively after you just sold shares, but the stock offering was the only mechanism to transfer ownership to the depositors and insiders of the bank. It's a bit confusing to talk about the benefits of an MHC buyback if you don't really know what a "mutual holding company' is. Like a BDC, though, it's worth educating yourself about this corporate structure. They are not always in the bargain bin, but if you get educated, you will be ready to pounce when the price is right.
What is a "second stage"?
It might be easier to re-read some past postings on the subject. Go to the HCBK Yahoo board and read messages 230-240...the basics of a second stage offering are explained there.
Tennee, I personally own loads of ARCC...and in managed accounts, I own other BDC's (including ACAS). These have performed just like we had hoped and expected. There have been some thrifts that have performed equally as well or better. Take a look at the Hudson City chart when you are over there. Coincidentally, like now, I had choices back then between some nice looking BDC's and thrifts to buy...and I chose to do both (just like now).