Targeted Strategies for Today's Evolving Markets

MissionIR Blog

Why Anchor BanCorp Wisconsin Inc. (ABCW) Represents a Value Investing Opportunity through its Business Model

The Financial sector is a treasure trove of hidden stock value in the after-math of the sub-prime crisis. The S&Ls/Savings Bank industry is full of professionally managed banks. Some of them list real estate on their balance sheets at prices far below inherent and future worth. This kind of stock is nearly perfect for young and patient professionals with modest savings and high capital appreciation ambitions!

This company from Madison, WI has been in the savings and loan holding business for over a decade. It is a holding stock and operates through a wholly owned subsidiary. The operating bank has a full range of financial products and services. It meets the usual loan and savings needs of students, professionals, and families. It also deals with the corporate sector through lines of credit, commercial real estate loans, and checking accounts. The bank has a strong presence in many important growth centers of Wisconsin, with more than 50 full-service sites in the state.

The holding company has another subsidiary that deals in real estate. This includes foreclosed properties. This is of strategic importance because most of the loans advanced by the operating bank are secured by first liens on real estate. The latter has even distribution between single-family homes and commercial properties. The stock offers superior long term value through its stable and professional approach to a business that has been temporarily buffeted by some negligent management teams in large international banks.

The company has announced a nearly 40% drop in net income during the Most Recent Quarter. The stock has traded barely above its 52-week low of $19.45 with a price of $20.35 on February 22, 2008. However, investors should consider the bank’s real estate assets and securities. The company has an average Net Profit Margin of 23.64 over the last five years, against just 18.41 achieved by the entire Financial Sector during this period.

Let us hear your thoughts below:

This entry was posted in Small Cap News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *