K-FED BANCORP (KFED $11) is a Mutual Holding
Company whi
ch just sold 5,686,750 shares of common stock at $10.00
per share in a subscription offering. In addition, 8,860,750
shares of the holding company’s common stock were issued
to K-Fed Mutual Holding Company. The stock opened at $14 and
has headed south ever since, along with most bank stocks over
the past few weeks. Kaiser Federal Bank has earned a 5 star Superior
rating for 40 straight years. They have 4 locations in Los Angeles,
San Diego and Santa Clara counties and have served this market
for over 50 years. Trading at 1.70 times book for a MHC, is cheap,
especially for the strong markets they are in. Many MHC’s
trade at 2-3 times book, or more, in this current market.
Their asset quality is near perfect and reserves are very strong.
They also have 30 ATM’s and total assets are $448 million.
Management owns about
7% of the stock and the Bank has grown
nicely over the past 5 years (formerly they were a credit union).
Look for strong earnings growth for several years and a sale
of the Bank in 4-5 years at $26-$29+ a share. Net interest margins
are ok at 2.20%. The bottom line is that they are in the right
markets where there is plenty of growth and the recent market
sell off has given us all a chance to get in, at a fair price.
This stock is cheap and trades plenty, buy it now.
Accumulate now under $11.50 and buy all you can under $11.
Downside should be limited to around $10.50 a share. Headquartered
Covina, CA.
FOLLOW UPS:
1. INTERVEST BANCSHARES CORP (IBCA) earnings
up 52% to $0.41 a share in the first quarter with more shares
outstanding. Wow.
2. NORTHEAST INDIANA BANCORP (NEIB) announced
a new 5% stock repurchase program. Hold.
3. SILVER STATE BANCORP (SSBX) earnings up
116% in the latest quarter to $.078 a share, and assets up 43%.
Great numbers, but shares are getting fully valued. Sell over
$70.
4. NORTH DALLAS BANK AND TRUST (NODB) earnings
down slightly to $0.61 per share in the first. Buy more under
$51.
5.NBC CAPITAL CORP (NBY) completed their
acquisition of Enterprise Bancshares. Hold.
6.PROVIDENT FINANCIAL (PFS) has sold off sharply
in the recent sell off, time to get in under $17 and buy all
you can under $16. Strong NJ franchise worth $28.00 - 2-4 years
out. Liquid stock with 10% downside risk from the
$16.50 level.
7.HIBERNIA CORP (HIB) now our 5 th largest
holding. Buy all you can now under $22.
We have or are covering all NY area shorts this week
for a nice profit.
There a
re still many overpriced Banks all-over the
place but many are in “no mans land” now, too late
to “short” but too early, to buy.
For aggressive accounts you should also look at AF below $33.50
and ICBC below $36.50 as short-term trades only. They should
have no more than 10% downside risk from these levels and 20%
upside potential.
Hughes Investment
Management can and does take positions in
stocks it recommends.
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
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575).
