Insights
Using Strong Markets to Run Numbers and Fade “Inertia Banks”
As banks rally at the same time many of them are making low ROI loans, we're spending a minute this afternoon making sure folks know what they are getting when they buy the sector. Is banking a good business? A good business returns more than its cost of capital...
The Pacific Enterprise Sale: An eye-opening perspective on bank mergers
Last week Pacific Enterprise (PEBN) announced it was selling to Bay Commercial (BCML). Pacific Enterprise is a $650 million, 1-branch bank in Irvine, CA with 1/3 of loans in PPP, typically earning 7% ROE at 65% efficiency. Normally PEBN holders would read the merger...
How Will Central Bank Digital Currencies Work, Will They Disrupt the Banking System, and Who Wins or Loses?
We have gotten a number of questions about what digital currencies mean, so below is a brief primer on their current status and potential impact. While this topic may seem wonky today, we will all at some point in the next few years likely have the option of a digital...
A Key Factor Separating Bank Compounders vs. Laggards…
Owning a basket of the most efficient banks is a consistently outperforming strategyUpcoming forced selling brings a few opportunities. Sort for efficiency among the forced selling We are currently entering an unusual season, when up to 80 banks are added, but mostly...
Banks are not as cheap as they were, but several strategies still make sense
4 strategies to find performance in an otherwise lofty market
Time to move to the “Coastal”? Coastal Financial (CCB) is different.
Coastal Financial is a bank that has found a way to get pricing power.
Does a community bank want to sell? Use this proxy season to learn the secrets.
Learning the secrets to bank mergers from proxy reports.
Nice rally banks got there…shame if something were to happen to it.
Does the bank rally stall? Reading Warren Buffet's letter this past weekend, bank investors might wonder why Berkshire's investment heads dumped so many banks near the bottom. After all, banks are not far behind airlines and wildcatters in line to benefit from...
Financials outperforming tech? Yes it can continue.
The friendly folks at Goldman recently ran a regression of which sectors do well with rising rates. If you can't read the chart below, rising rates are bad for stocks in the consumer, utilities, and software sectors, while they tend to support energy and financial...
Tools for Financials Investors Nervous About Inflation and Rates
We'll skip the Charlie Munder quotes; it's broadly apparent that we live in different times: US Debt: Inflation is the Only Way to Manage It (Treasury Dept) Nervousness is rational: Normally we don't see policymakers launch gargantuan, two-pronged stimulus 6 months...