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Security Federal Bancorp SFBK
September 30, 2014 - 10:27am EST by
Cries
2014 2015
Price: 24.00 EPS $0.00 $0.00
Shares Out. (in M): 0 P/E 0.0x 0.0x
Market Cap (in $M): 9 P/FCF 0.0x 0.0x
Net Debt (in $M): 0 EBIT 0 0
TEV (in $M): 0 TEV/EBIT 0.0x 0.0x

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  • Discount to book
  • Management Change
  • Buybacks
  • Micro Cap
  • Wrong public data
 

Description

Summary/Catalysts

A micro-cap bank with the following characteristics:

  • Sharecount reported by every public resource is wrong (they all show the FYE03 count).
  • Big discount to book, implying a 55%+ return on price appreciation if this re-rates to 1x book.
  • Get a 1.8%ish dividend yield on today’s price while you wait (although I’d be happier if this was 0 and it all was re-allocated to repurchases).
  • Old mgmt was 1-man show; allowed the bank to suffer from declining loan assets and growing cash drag.
  • New mgmt sees the discount, and is repurchasing actively. 
  • New mgmt has cleaned up the cash drag by re-allocating excess cash to medium duration munis and agency MBS. 
  • Bank is only lightly levered.  Implosion risk is modest, despite this being a micro cap bank.  Strong historical performance track record.

Writeup

Appendix (You will likely need all of these)

I do not hold a position of employment, directorship, or consultancy with the issuer.
I and/or others I advise hold a material investment in the issuer's securities.

Catalyst

  • Sharecount reported by every public resource is wrong (they all show the FYE03 count).
  • Big discount to book, implying a 55%+ return on price appreciation if this re-rates to 1x book.
  • Get a 1.8%ish dividend yield on today’s price while you wait (although I’d be happier if this was 0 and it all was re-allocated to repurchases).
  • Old mgmt was 1-man show; allowed the bank to suffer from declining loan assets and growing cash drag.
  • New mgmt sees the discount, and is repurchasing actively. 
  • New mgmt has cleaned up the cash drag by re-allocating excess cash to medium duration munis and agency MBS. 
  • Bank is only lightly levered.  Implosion risk is modest, despite this being a micro cap bank.  Strong historical performance track record.
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