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Once again it’s Thanksgiving. Time to reflect on everything that has happened to us over the year. You know when those Pilgrims and Native Americans sat down almost 400 years ago to eat, they really showed us a great deal of wisdom. Sure, all of us have experienced some pain and heartache this year. However, I’m sure all of us can take inventory of all of the really wonderful things we have in our lives. For starters, how about our family and friends? Please don’t take things for granted. Let’s be thankful.
Having said all that, it’s time for yet another $$$MR. MARKET$$$ pick. The candidates were all very strong. Lots of earnings earnings earnings to choose from. Today I bought WSBK at 31.50 (15.75 post split). I will sell it in 4 to 6 weeks at 36.41 (well, it will be 18.21 after the split). Here’s why I like WSBK:
I can hear the groans coming from across America on this most American of holidays. “Oh no, $$$MR. MARKET$$$, not another small California bank! We want high flying hot stuff techno gadget stuff that just goes up and up.” $$$MR. MARKET$$$ says, “Shut your mouth before I turn into the Stock Nazi and say ‘No more stocks for you! Next!’
Now take a look:
Wilshire State Bank is a community bank with a focus on commercial
real estate lending and general commercial banking, with its primary
market encompassing the multi-ethnic populations of the Los Angeles
Metropolitan area. The bank's strategic goals include increasing
shareholder and franchise value by continuing to grow its multi-ethnic
banking business and expanding its geographic reach to other similar
markets with strong levels of small business activity. The Bank offers personal banking services such as checking accounts, including personal and money market; savings accounts, installment savings and time certificates of deposit, and loans, including personal and credit card loans. That’s right, another bank.
WSBK stock is up 195% in the last 12 months. All this price appreciation over a modest P/E of 19.0. What’s really remarkable is how steady its appreciation has been. 12-month r^2 is 0.84, 6-month r^2 is an unbelievable 0.95 and 3-month r^2 is 0.91. I couldn’t have drawn a straighter line for this chart if I had used a ruler! Even Stockscouter agrees: The StockScouter measure of relative price change and consistency is very high. Very positive.
IBD ratings on WSBK are 97 for EPS and 90 for RS putting it in the top tier of all of the stocks that it tracks. IBD also says that WSBK is ranked #2 of all of the West / Southwest banks in their database. Shares are under heavy accumulation by financial institutions. Positive for a small company like WSBK. IBD also notes that it’s Sales + profit margins + ROE rating give WSBK an “A” and that it is under Accumulation (another “A”).
The really timely news is that WSBK is going to offer a 2 for 1 stock dividend for shareholders of record on November 30, 2003. Thus by buying the stock today, I got in on the split. I just love splits. In fact, WSBK is split crazy. Here’s what the boss had to say about splits: “We issued a 10% stock dividend in May of this year and an
additional two-for-one stock split in August 2002 in an effort to
improve liquidity for our shareholders," stated Soo Bong Min,
President and CEO. "Our year-to-date net income is up 48% over the
first nine months of 2002, and we believe in sharing that success with
those that have supported Wilshire State Bank." Wow, a split! This is like a Christmas present on Thanksgiving!! And I wasn’t even a good boy this year.
Don’t you just love a guy whose middle name is “Bong”? I bet he had a lot of fun in his college dorm. When the football players used to punch him and give him atomic wedgies, I bet they called them “Bong Hits”.
But this boss has not been drinking the bong water. In October, Wilshire State Bank reported record profits for the third quarter and first nine months of 2003. For the nine-month period, net income was $9.3 million, or $1.30 per share, from $6.3 million, or $0.91 per share a year earlier. Third quarter net income increased 46% to $3.3 million, or $0.46 per diluted share, from $2.3 million, or $0.32 per diluted share in the third quarter last year. The dude knows how to work that interest rate spread. Earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years This is positive! The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. You guessed it..positive!
Here’s his forecast: "We are continuing to take advantage of the banking opportunities in our niche market and expanding our presence into new markets with a need for an experienced business lender focused on the multi-national community," stated Soo Bong Min, President and CEO. "Our new branch in the Irvine area marks our second Orange County office. Our ongoing branch expansion has contributed to a 77% increase in new loan production over the third quarter last year and has built a platform for continued growth and profitability."
Mr. Min is not taking bong hits. He is making himself and his shareholders very wealthy. Mr. Min's employment agreement with Wilshire State Bank has been extended. His contract, previously scheduled to end in June 2005, now runs through May 2007. Min joined the bank in late July of 1999, when Wilshire had 6 full service branches and net income of $1.9 million through the first nine months of the year. Since that time, the branch network has nearly doubled to 11 and net income is up nearly five-fold to $9.3million in the first three quarters of 2003. This guy is the equivalent of Pedro Martinez in the banking industry. He has to be the biggest free agent banker out there and WSBK has him for 4 more years.
"As part of our growth and diversification strategy, we have
increased our focus on consumer lending," Min said. "While we will
continue to target small businesses, we rolled out an Auto Loan Center
in March and a Home Loan Center in September. The Auto Loan Center is
already contributing to our loan growth, and we expect the Home Loan
Center to begin generating non-interest income in the form of gain on
sale of loans in the fourth quarter." As our economy recovers, they announced 8.2% growth yesterday, and particularly California’s economy recovers, the consumer will be the engine of growth for this recovery. The rocket fuel for this engine will be consumer lending. I can see Arnold and Mr. Min getting the munchies as the entire California electorate is borrowing and spending!
Outstanding lending activity continues to drive the bank's
success. New loan production increased 77% to $151 million, compared
to $85 million in the third quarter last year. At quarter-end, total
loans were $700 million, up 42% from $493 million a year ago. Total
assets have grown 43% to $892 million, from $624 million a year ago,
and deposits have increased 38% to $786 million, compared to $569
million at the end of the third quarter last year.
Yes it all boils down to earnings doesn’t it? Whether you are a butcher, baker or candlestick maker, you need that do-re-mi to get the hot chicks (or you need 19” biceps, but I digress). Analysts have WSBK pegged at $1.75/share for 2003 and $1.95/share for 2004. WSBK’s earnings have grown at a rate of 30% over the last few years. $$$MR. MARKET$$$ thinks that WSBK will come in at $1.78 for 2003 and $2.30 for 2004. At today’s PE of 19.0, this means the stock will climb to 44.39 by next year, well past my sell target. You’re getting almost 30% earnings growth for a P/E of less than 20!! $$$MR. MARKET$$$ knows a deal when he sees one.
Return on Equity has grown to 24.8% (vs. industry average of 15.1%) and ROA is 1.6%. Stable or increasing ROEs indicate a well-managed company. WSBK has a debt/equity ratio of 0.19 vs. the industry average of 1.18. Return on invested capital is near 16% whereas the industry average is only 6.9%. Net profit margin is around 20% while industry averages hover around 17.9%.
Do you remember NARA, another $$$MR. MARKET$$$ winner? NARA is similar to WSBK being a small ethnic based California bank. WSBK’s efficiency ratio (expenses / income) is almost 10% better than NARA’s.
Here’s one for you techies: Previous day's closing price for WSBK was significantly above its 50-day moving average. Very positive
So what does a small California bank that caters to Asians have to do with Thanksgiving?? Think about it. There’s nothing more American than the opportunity to grow a small company out of a market niche. Yes…capitalism and opportunity. This is America. There is nothing more American……wait a minute, I lied..there is something more American....FOOTBALL! and gambling on FOOTBALL!!!:
F 3 11/27 (F) GREEN BAY AT DETROIT (12:30 pm ET)
Wager Id Outcome Points
6003 GREEN BAY -6.5 -115 Wager
6004 DETROIT +6.5 -105 Wager
6103 OVER 43.5 Wager
6104 UNDER 43.5 Wager
6203 GREEN BAY PICK -330 Wager
6204 DETROIT PICK +250 Wager
F 5 11/27 (F) MIAMI AT DALLAS (4:05 pm ET)
Wager Id Outcome Points
6005 MIAMI +3.0 -105 Wager
6006 DALLAS -3.0 -115 Wager
6105 OVER 35.5 Wager
6106 UNDER 35.5 Wager
6205 MIAMI PICK +135 Wager
6206 DALLAS PICK -155 Wager
Take the OVER 43 ½ in the Lions game and lay the wood and bet on Parcells and the Cowboys -3.0 over the Dolphins. The Packers can’t play defense and there is no way Bill Parcells is going to lose his first Thanksgiving game coaching America’s team with Jerry Jones on the sideline.
Now get out of my way and give me the clicker and go give me some beers!
Happy Thanksgiving!
I am HUGE!!!
$$$MR. MARKET$$$$
Having said all that, it’s time for yet another $$$MR. MARKET$$$ pick. The candidates were all very strong. Lots of earnings earnings earnings to choose from. Today I bought WSBK at 31.50 (15.75 post split). I will sell it in 4 to 6 weeks at 36.41 (well, it will be 18.21 after the split). Here’s why I like WSBK:
I can hear the groans coming from across America on this most American of holidays. “Oh no, $$$MR. MARKET$$$, not another small California bank! We want high flying hot stuff techno gadget stuff that just goes up and up.” $$$MR. MARKET$$$ says, “Shut your mouth before I turn into the Stock Nazi and say ‘No more stocks for you! Next!’
Now take a look:
Wilshire State Bank is a community bank with a focus on commercial
real estate lending and general commercial banking, with its primary
market encompassing the multi-ethnic populations of the Los Angeles
Metropolitan area. The bank's strategic goals include increasing
shareholder and franchise value by continuing to grow its multi-ethnic
banking business and expanding its geographic reach to other similar
markets with strong levels of small business activity. The Bank offers personal banking services such as checking accounts, including personal and money market; savings accounts, installment savings and time certificates of deposit, and loans, including personal and credit card loans. That’s right, another bank.
WSBK stock is up 195% in the last 12 months. All this price appreciation over a modest P/E of 19.0. What’s really remarkable is how steady its appreciation has been. 12-month r^2 is 0.84, 6-month r^2 is an unbelievable 0.95 and 3-month r^2 is 0.91. I couldn’t have drawn a straighter line for this chart if I had used a ruler! Even Stockscouter agrees: The StockScouter measure of relative price change and consistency is very high. Very positive.
IBD ratings on WSBK are 97 for EPS and 90 for RS putting it in the top tier of all of the stocks that it tracks. IBD also says that WSBK is ranked #2 of all of the West / Southwest banks in their database. Shares are under heavy accumulation by financial institutions. Positive for a small company like WSBK. IBD also notes that it’s Sales + profit margins + ROE rating give WSBK an “A” and that it is under Accumulation (another “A”).
The really timely news is that WSBK is going to offer a 2 for 1 stock dividend for shareholders of record on November 30, 2003. Thus by buying the stock today, I got in on the split. I just love splits. In fact, WSBK is split crazy. Here’s what the boss had to say about splits: “We issued a 10% stock dividend in May of this year and an
additional two-for-one stock split in August 2002 in an effort to
improve liquidity for our shareholders," stated Soo Bong Min,
President and CEO. "Our year-to-date net income is up 48% over the
first nine months of 2002, and we believe in sharing that success with
those that have supported Wilshire State Bank." Wow, a split! This is like a Christmas present on Thanksgiving!! And I wasn’t even a good boy this year.
Don’t you just love a guy whose middle name is “Bong”? I bet he had a lot of fun in his college dorm. When the football players used to punch him and give him atomic wedgies, I bet they called them “Bong Hits”.
But this boss has not been drinking the bong water. In October, Wilshire State Bank reported record profits for the third quarter and first nine months of 2003. For the nine-month period, net income was $9.3 million, or $1.30 per share, from $6.3 million, or $0.91 per share a year earlier. Third quarter net income increased 46% to $3.3 million, or $0.46 per diluted share, from $2.3 million, or $0.32 per diluted share in the third quarter last year. The dude knows how to work that interest rate spread. Earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years This is positive! The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. You guessed it..positive!
Here’s his forecast: "We are continuing to take advantage of the banking opportunities in our niche market and expanding our presence into new markets with a need for an experienced business lender focused on the multi-national community," stated Soo Bong Min, President and CEO. "Our new branch in the Irvine area marks our second Orange County office. Our ongoing branch expansion has contributed to a 77% increase in new loan production over the third quarter last year and has built a platform for continued growth and profitability."
Mr. Min is not taking bong hits. He is making himself and his shareholders very wealthy. Mr. Min's employment agreement with Wilshire State Bank has been extended. His contract, previously scheduled to end in June 2005, now runs through May 2007. Min joined the bank in late July of 1999, when Wilshire had 6 full service branches and net income of $1.9 million through the first nine months of the year. Since that time, the branch network has nearly doubled to 11 and net income is up nearly five-fold to $9.3million in the first three quarters of 2003. This guy is the equivalent of Pedro Martinez in the banking industry. He has to be the biggest free agent banker out there and WSBK has him for 4 more years.
"As part of our growth and diversification strategy, we have
increased our focus on consumer lending," Min said. "While we will
continue to target small businesses, we rolled out an Auto Loan Center
in March and a Home Loan Center in September. The Auto Loan Center is
already contributing to our loan growth, and we expect the Home Loan
Center to begin generating non-interest income in the form of gain on
sale of loans in the fourth quarter." As our economy recovers, they announced 8.2% growth yesterday, and particularly California’s economy recovers, the consumer will be the engine of growth for this recovery. The rocket fuel for this engine will be consumer lending. I can see Arnold and Mr. Min getting the munchies as the entire California electorate is borrowing and spending!
Outstanding lending activity continues to drive the bank's
success. New loan production increased 77% to $151 million, compared
to $85 million in the third quarter last year. At quarter-end, total
loans were $700 million, up 42% from $493 million a year ago. Total
assets have grown 43% to $892 million, from $624 million a year ago,
and deposits have increased 38% to $786 million, compared to $569
million at the end of the third quarter last year.
Yes it all boils down to earnings doesn’t it? Whether you are a butcher, baker or candlestick maker, you need that do-re-mi to get the hot chicks (or you need 19” biceps, but I digress). Analysts have WSBK pegged at $1.75/share for 2003 and $1.95/share for 2004. WSBK’s earnings have grown at a rate of 30% over the last few years. $$$MR. MARKET$$$ thinks that WSBK will come in at $1.78 for 2003 and $2.30 for 2004. At today’s PE of 19.0, this means the stock will climb to 44.39 by next year, well past my sell target. You’re getting almost 30% earnings growth for a P/E of less than 20!! $$$MR. MARKET$$$ knows a deal when he sees one.
Return on Equity has grown to 24.8% (vs. industry average of 15.1%) and ROA is 1.6%. Stable or increasing ROEs indicate a well-managed company. WSBK has a debt/equity ratio of 0.19 vs. the industry average of 1.18. Return on invested capital is near 16% whereas the industry average is only 6.9%. Net profit margin is around 20% while industry averages hover around 17.9%.
Do you remember NARA, another $$$MR. MARKET$$$ winner? NARA is similar to WSBK being a small ethnic based California bank. WSBK’s efficiency ratio (expenses / income) is almost 10% better than NARA’s.
Here’s one for you techies: Previous day's closing price for WSBK was significantly above its 50-day moving average. Very positive
So what does a small California bank that caters to Asians have to do with Thanksgiving?? Think about it. There’s nothing more American than the opportunity to grow a small company out of a market niche. Yes…capitalism and opportunity. This is America. There is nothing more American……wait a minute, I lied..there is something more American....FOOTBALL! and gambling on FOOTBALL!!!:
F 3 11/27 (F) GREEN BAY AT DETROIT (12:30 pm ET)
Wager Id Outcome Points
6003 GREEN BAY -6.5 -115 Wager
6004 DETROIT +6.5 -105 Wager
6103 OVER 43.5 Wager
6104 UNDER 43.5 Wager
6203 GREEN BAY PICK -330 Wager
6204 DETROIT PICK +250 Wager
F 5 11/27 (F) MIAMI AT DALLAS (4:05 pm ET)
Wager Id Outcome Points
6005 MIAMI +3.0 -105 Wager
6006 DALLAS -3.0 -115 Wager
6105 OVER 35.5 Wager
6106 UNDER 35.5 Wager
6205 MIAMI PICK +135 Wager
6206 DALLAS PICK -155 Wager
Take the OVER 43 ½ in the Lions game and lay the wood and bet on Parcells and the Cowboys -3.0 over the Dolphins. The Packers can’t play defense and there is no way Bill Parcells is going to lose his first Thanksgiving game coaching America’s team with Jerry Jones on the sideline.
Now get out of my way and give me the clicker and go give me some beers!
Happy Thanksgiving!
I am HUGE!!!
$$$MR. MARKET$$$$
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