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Bank of the Ozarks, Inc. Message Board

  • wilmajoan wilmajoan Jul 3, 2003 11:25 AM Flag

    Tanking in 2000

    Certainly part of the reason for the decline in 2000 was the tech bubble which drew money from other investmants. However the biggest single drop in 2000 occured when Ozark announced that they had taken a big hit on a commercial loan. If I remember correctly there was some question as to whether the loan process had been compromised by questionable activity within Ozark. Certainly that has been long overcome and the stock has been on a tear recently. My only caveat at this time is one of valuation. A stock can not double its price every year while growing it's earnings at a 40% rate. This one has been growing in price far faster than it has been growing in earnings. Some banks will see a nice pop with a 15% quarterly increase but Ozark would probably drop since 15% would be considered a slowdown. The current p/e is well above the average for similar regionals but diserved as long as the growth ratios continue.

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    • This is my recollection as well. After the news of the bad loan hit, the stock price plummeted. People were wondering what other bad loans were made. It turns out that it was the only one. The stock price returned to its original levels as record earnings returned and continued.

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