Western Alliance Bancorp (WAL): The Top Contributor of Miller Value Partners Income Strategy
Miller Value Partners, an investment management company, released its “Income Strategy” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the strategy returned 11.07% net of fees versus a 7.04% return for the benchmark, ICE BofA US High Yield Index, and underperforming the S&P 500’s 11.69% gain. Year-to-date the fund was up 12.59% net of fees compared to 13.44% for the benchmark and 26.29% return for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Miller Value Partners Income Strategy featured stocks such as Western Alliance Bancorporation (NYSE:WAL) in the fourth quarter 2023 investor letter. Western Alliance Bancorporation (NYSE:WAL) is a bank holding company headquartered in Phoenix, Arizona. On January 11, 2024, Western Alliance Bancorporation (NYSE:WAL) stock closed at $63.89 per share. One-month return of Western Alliance Bancorporation (NYSE:WAL) was -3.63%, and its shares lost 1.69% of their value over the last 52 weeks. Western Alliance Bancorporation (NYSE:WAL) has a market capitalization of $6.994 billion.
Miller Value Partners Income Strategy stated the following regarding Western Alliance Bancorporation (NYSE:WAL) in its fourth quarter 2023 investor letter:
"Western Alliance Bancorporation (NYSE:WAL) was the top contributor during the quarter. The regional bank reported 3Q23 and Earnings per Share (EPS) of $1.97, -18.6% year-over-year (Y/Y) (+0.5% sequentially), ahead of consensus of $1.91. Total deposits rose 6.5% sequentially to $54.3B at the end of the quarter, with insured and collateralized deposits representing 82% of total deposits as of quarter-end, while the bank’s common equity tier 1 (CET1) ratio expanded 50bps sequentially to 10.6% as of quarter-end. Tangible book value per share (TBV/share) came in at $43.66 (P/TBV of ~1.5x) as of quarter-end, +17.5% Y/Y, as TBV/share has now grown at a 19.2% compound annual growth rate (CAGR) since the end of 2013, with management highlighting that this is more than 6x the growth rate of its peers over the same period. Management is guiding for 4Q23 deposit growth of $250MM, loan growth of $150MM, net interest margin (NIM) of 3.65%, and net charge-offs of 10bps, at the respective midpoints, and also reiterated their expectation for a return to prior balance sheet guidance for loan and deposit growth of $500MM and $2B per quarter, respectively, in 2024."
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Western Alliance Bancorporation (NYSE:WAL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Western Alliance Bancorporation (NYSE:WAL) at the end of third quarter which was 38 in the previous quarter.
We discussed Western Alliance Bancorporation (NYSE:WAL) in another article and shared the picks from Bill Miller’s portfolio. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
