I sat down with Schroders to discuss the investment opportunity in thrifts and how they can fit into an investment portfolio due to their attractive risk-adjusted returns and idiosyncratic value.
top of page
Search
I spoke with Andrew Walker of Yet Another Value Podcast about why thrifts remain an interesting place to find value in the market, how activists are a key catalyst in this niche and key things to watch for when you're looking at small demutualized banks.
We've already seen a few thrift buyouts this year, including First Financial Northwest, which was highlighted on this blog.
Stock repurchases at a discount to tangible book value at a thrift conversion? It's one of the top signs a management team can show you that it's looking out for shareholders' best interests. Buybacks are an even better sign when execs make them of their own free will and don't have an activist investor starting a campaign if they're not seeing any action.
And that's what we have at FFBW (NASDAQ:FFBW), a recently converted Milwaukee-area thrift that's executing one of the fastest buybacks I've ever seen. Even with mediocre returns on equity, this massively overcapitalized bank could return investors around 50% over the next 12 to 18 months, with a reasonable chance of being acquired toward the end of that period.
The rest of the article is available on Seeking Alpha: https://seekingalpha.com/article/4514482-ffbw-thrift-conversion-rapidly-repurchasing-stock
Blog: Blog2
bottom of page