To anybody that bought this recently what were the thoughts behind your buying? The fundamentals make this stock look way over priced. A bank stock with a p/e ratio in the 70's. I had bought this at it's ipo of 10 and sold in the 16s. My father still currently owns and I constantly urge him to sell. I don't get the buyback either. It's buying back very expensive shares of its own company when it could be using that money more constructively. Honestly though, am I wrong on this?
I'm in agreement. Note bank stocks normally are looked at on a price to book value rather than PE and you typically look for ones under 1.0 for a value play and this stock is at 2.0 which is more expensive by a large amount compared to its nearest competitors and the large players like WB and BAC. Short interest is very high, so there is too much danger in a short squeeze to go that route. Insiders own about 75% and they have completely stopped buying while institutions have sold heavily telling you where the smart money is going. Also, buybacks are a way to support the stock price and will benefit the insiders the most, which I do not like. Looking at the earnings revenues are growing which is a good sign, quality of loans are good, but it comes down to the basics expenses are growing much faster than revenue and eating away at margins. Anytime this occurs a company should be trading at a discount and this one is trading at a premium. Stock is at a major support and if it breaks down from hear cut your losses and wait for buy in time as things improve as the company itself I like, but not at this price.
i agree and have done the same thing . i think this one is trading so rich because there is a big short interest and i think there are some 13d filings from activists and the float is small and the bank buys shares in good size , but there is no value here...it is a good stock to sell////sinejoco i like the bank but not th ee price so it is purley a valuation call..joco