Small Bank Newsletter

May 06

 

1. COMMERCIAL BANKSHARES INC. (CLBK $ 33) operates as the holding company for Commercial Bank of Florida that serves Miami-Dade and Broward counties in south Florida. They operate 14 locations with over $1 billion in assets and growing fast, as they are in some of the best markets in the Country. This Bank takes no crazy risks, asset quality is almost perfect and reserves are solid. Insiders own a lot over 15%, and the top 2 guys are getting up their in age, 68 and 69 years old. We think it could be time for them to sell into this hot Florida market. Even if they don't sell, you should see a 15%+ return on average, annualized, for the next 5- 10 years, plus a nice 2.30% cash dividend. If they sell they should get an easy $45 a share for 36% return today. Their book value will be almost $15 a share by year-end, that means at 3 times book and 22 times earnings, which could be had in a deal. Many small banks with very limited earnings are getting 2.5 times+ book and P/E of 30-40. This Bank again, is solid as a rock with great management that owns a meaningful stake in the Bank. Growth should continue at around 10%-20% across the board for loans, deposits and assets for many years to come. Florida is growing like a weed and a Bank of this size can make a killing with the right management team. There have been 3 deals of smaller banks in their market just in the past month. Downside should be limited to around 10% in a big-sell off, so simply a great risk/reward ratio. Accumulate under $34 slowly and buy like crazy under $32. Thinly traded about 5,000 shares a day trade, and have just over 6 million shares outstanding, buy it slowly. This is a great bank period. Headquartered Miami, Florida.

 

As always, you may call me with any questions on any stock. This is a free service to our subscribers.

To contact Douglas Hughes via email - dhughes33@charter.net

Personal Account Management: Bank Stock Portfolios.1.25%-1.75% FEE. $1,000,000 Minimum. Douglas Hughes Hughes Investment Management. 1-888-814-7575.

The Small Bank Newsletter is published 12 times a year. (To Subscribe: 1-888-814-7575).

Douglas Hughe s -- Small Bank Newsletter, Hughes Investment Management , can and does take positions, in stocks it recommends.All material Copyright© 1995-2006 by Douglas Hughes. Reproduction of this publication in whole or in part is strictly forbidden.

 

Small Bank Newsletter Website [Feedback] [Top]