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At $29.89, Is Territorial Bancorp Inc (NASDAQ:TBNK) A Buy?

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Ashwin Virk
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Territorial Bancorp Inc (NASDAQ:TBNK), operating in the financial services industry based in United States, saw its share price hover around a small range of $29.48 to $31.94 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Territorial Bancorp’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Territorial Bancorp

What’s the opportunity in Territorial Bancorp?

The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 18.56x is currently trading slightly below its industry peers’ ratio of 22.82x, which means if you buy Territorial Bancorp today, you’d be paying a reasonable price for it. And if you believe Territorial Bancorp should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Territorial Bancorp’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Territorial Bancorp look like?

NasdaqGS:TBNK Future Profit Mar 28th 18
NasdaqGS:TBNK Future Profit Mar 28th 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Territorial Bancorp’s earnings over the next few years are expected to increase by 48.34%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in TBNK’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at TBNK? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on TBNK, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for TBNK, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Territorial Bancorp. You can find everything you need to know about Territorial Bancorp in the latest infographic research report. If you are no longer interested in Territorial Bancorp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.