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($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
You know all of these kids running around with their smart phones and PayPal, Google Pay, Apple Pay Cash, Venmo, and Square. They don’t seem to understand that sometimes you need a little moolah to make people smile. Like when the Triple AAA guy comes to jump start your car, you can’t say thanks and then send him a Venmo. Nothing like a dead President handshake to make him happy. Or when you go out to Vegas and the hotel desk clerk says, “gee I am sorry but the suites all seem to be sold out.” Nothing like an Uncle Ben Franklin dropped quietly onto her keyboard makes the hotel rooms magically open up for you. You can’t Paypal that. Or you go to a crowded restaurant and the hostess says gee I am sorry sir but we can’t seem to find your reservation. Well in that case, I visit the men’s room and leave an upper decker and then go get pizza. Of course, when I pay for the pizza, it’s cash only. That’s right…nothing beats – cold – hard – cash.
Yesterday I bought stock in Meta Financial Group, Inc. (CASH) at 35.80. I will sell it in 4 – 6 weeks at 41.23. Here’s why I like CASH:
It all starts with the chart:
This stock is up 70% in the last 12 months and its upward momentum climb has been relentless. Despite this enormous success, its PE is only 14 and its forward PE is only 9. It’s a great growth stock with incredible value. What’s causing all of this?
Meta Financial Group, Inc. operates as the holding company for MetaBank that offers various banking products and services in the United States. The company accepts various deposit products, including statement savings accounts, money market savings accounts, negotiable order of withdrawal accounts, and checking accounts; and deposits related to prepaid cards, which primarily comprise checking accounts and certificate accounts. It also provides loans, such as commercial finance loans, commercial and multi-family real estate loans, one-to-four family mortgage loans, consumer finance loans, taxpayer advance loans, agriculture loans, consumer and commercial operating loans, and commercial insurance premium finance products. In addition, the company issues prepaid cards and consumer credit products; sponsors automated teller machines into various debit networks; and offers tax refund transfer and other payment industry products and services. It operates nine full-service branch offices in Storm Lake and Des Moines, Iowa; and Brookings and Sioux Falls, South Dakota, as well as 14 non-branch offices. The company was founded in 1954 and is headquartered in Sioux Falls, South Dakota.
Aaah…South Dakota. It has Mount Rushmore, but all of those Presidents are dead. It doesn’t have an FBS football team or any major pro sports franchises. It doesn’t even have the oil that its northern cousin, North Dakota, has. But they have embraced deregulation, and this is making it a very attractive place for bazillionaires to park their money. If money is flowing to South Dakota, them banks in South Dakota are going to reap the benefits. Who needs a swiss bank account when you have South Dakota? A South Dakotan trust protects assets from claims from pissed off ex wives, business partners that you screwed over, creditors and basically anyone else who might want to sue you. Rich people love that. Ten years ago, South Dakotan trust companies held $57 billion in assets. Now it’s up over $350 billion. But never mind all that, let’s talk about Meta Financial.
In the last 5 years, this stock is up over 200%. But don’t be afraid of companies that have done well in the market. They are doing well for a reason. Over that period, Meta Financial Group managed to grow its earnings per share at 24% a year. This EPS growth is on par with the 25% average annual increase in the share price….that’s why the stock keeps going up.
CASH is:
During fiscal 2019, average deposits from their payments division grew 11% over the average for the fiscal year 2018. At the same time, they are positioning ourselves to take advantage of fee income opportunities in areas such as merchant acquiring, ACH origination and our faster payments initiatives.
META is also improving their interest earning asset mix by replacing lower yielding loans and investment securities, with higher yielding commercial loans while maintaining a strong credit profile.
Results for the fourth fiscal quarter and full fiscal year 2019 were awesome. Net income of $20.2 million for the quarter or $0.53 per diluted share and $97 million or $2.49 per diluted share for the year. Full year earnings per share growth of 49% over the prior year primarily reflected higher net interest income.
Just look at these comments by CEO Brad Hanson…yes he is the Hanson brother who couldn’t sing and none of the teeny bopper girls liked him, so he became a banker:
All of this sounds very positive. For fiscal year 2020, the company has provided earnings per share guidance range to be between $3.30 and $3.50 per share. Since most of the time they surprise on the upside, we’ll take the $3.50 number. If you multiply that by the PE of 14, you end up with a share price of $49, which is well past my selling target. That math is convincing enough for me to jump in.
So South Dakota, how about giving me some quatloops…or maybe just some cold hard CASH when I go to the pay window and sell this stock.
I am HUGE!
$$$MR. MARKET$$$
You know all of these kids running around with their smart phones and PayPal, Google Pay, Apple Pay Cash, Venmo, and Square. They don’t seem to understand that sometimes you need a little moolah to make people smile. Like when the Triple AAA guy comes to jump start your car, you can’t say thanks and then send him a Venmo. Nothing like a dead President handshake to make him happy. Or when you go out to Vegas and the hotel desk clerk says, “gee I am sorry but the suites all seem to be sold out.” Nothing like an Uncle Ben Franklin dropped quietly onto her keyboard makes the hotel rooms magically open up for you. You can’t Paypal that. Or you go to a crowded restaurant and the hostess says gee I am sorry sir but we can’t seem to find your reservation. Well in that case, I visit the men’s room and leave an upper decker and then go get pizza. Of course, when I pay for the pizza, it’s cash only. That’s right…nothing beats – cold – hard – cash.
Yesterday I bought stock in Meta Financial Group, Inc. (CASH) at 35.80. I will sell it in 4 – 6 weeks at 41.23. Here’s why I like CASH:
It all starts with the chart:
This stock is up 70% in the last 12 months and its upward momentum climb has been relentless. Despite this enormous success, its PE is only 14 and its forward PE is only 9. It’s a great growth stock with incredible value. What’s causing all of this?
Meta Financial Group, Inc. operates as the holding company for MetaBank that offers various banking products and services in the United States. The company accepts various deposit products, including statement savings accounts, money market savings accounts, negotiable order of withdrawal accounts, and checking accounts; and deposits related to prepaid cards, which primarily comprise checking accounts and certificate accounts. It also provides loans, such as commercial finance loans, commercial and multi-family real estate loans, one-to-four family mortgage loans, consumer finance loans, taxpayer advance loans, agriculture loans, consumer and commercial operating loans, and commercial insurance premium finance products. In addition, the company issues prepaid cards and consumer credit products; sponsors automated teller machines into various debit networks; and offers tax refund transfer and other payment industry products and services. It operates nine full-service branch offices in Storm Lake and Des Moines, Iowa; and Brookings and Sioux Falls, South Dakota, as well as 14 non-branch offices. The company was founded in 1954 and is headquartered in Sioux Falls, South Dakota.
Aaah…South Dakota. It has Mount Rushmore, but all of those Presidents are dead. It doesn’t have an FBS football team or any major pro sports franchises. It doesn’t even have the oil that its northern cousin, North Dakota, has. But they have embraced deregulation, and this is making it a very attractive place for bazillionaires to park their money. If money is flowing to South Dakota, them banks in South Dakota are going to reap the benefits. Who needs a swiss bank account when you have South Dakota? A South Dakotan trust protects assets from claims from pissed off ex wives, business partners that you screwed over, creditors and basically anyone else who might want to sue you. Rich people love that. Ten years ago, South Dakotan trust companies held $57 billion in assets. Now it’s up over $350 billion. But never mind all that, let’s talk about Meta Financial.
In the last 5 years, this stock is up over 200%. But don’t be afraid of companies that have done well in the market. They are doing well for a reason. Over that period, Meta Financial Group managed to grow its earnings per share at 24% a year. This EPS growth is on par with the 25% average annual increase in the share price….that’s why the stock keeps going up.
CASH is:
- Trading at 35% below its fair value
- Earnings are forecast to grow 16.92% per year
- Earnings grew by 87.9% over the past year
- Quality Earnings: CASH has high quality earnings.
- Growing Profit Margin: CASH's current net profit margins (22.5%) are higher than last year (18.1%).
- Earnings Trend: CASH's earnings have grown significantly by 33.3% per year over the past 5 years.
- Accelerating Growth: CASH's earnings growth over the past year (87.9%) exceeds its 5-year average (33.3% per year).
- Earnings vs Industry: CASH earnings growth over the past year (87.9%) exceeded the Mortgage industry 23.1%.
During fiscal 2019, average deposits from their payments division grew 11% over the average for the fiscal year 2018. At the same time, they are positioning ourselves to take advantage of fee income opportunities in areas such as merchant acquiring, ACH origination and our faster payments initiatives.
META is also improving their interest earning asset mix by replacing lower yielding loans and investment securities, with higher yielding commercial loans while maintaining a strong credit profile.
Results for the fourth fiscal quarter and full fiscal year 2019 were awesome. Net income of $20.2 million for the quarter or $0.53 per diluted share and $97 million or $2.49 per diluted share for the year. Full year earnings per share growth of 49% over the prior year primarily reflected higher net interest income.
Just look at these comments by CEO Brad Hanson…yes he is the Hanson brother who couldn’t sing and none of the teeny bopper girls liked him, so he became a banker:
- We are expecting double digit growth year-over-year and it could come from different levers there.
- We have a broad set of products to serve our customers. we expect to generate access capital in 2020 and beyond.
- And we will certainly consider repurchase activity within the context of overall capital management as the board and management reviews our options.
All of this sounds very positive. For fiscal year 2020, the company has provided earnings per share guidance range to be between $3.30 and $3.50 per share. Since most of the time they surprise on the upside, we’ll take the $3.50 number. If you multiply that by the PE of 14, you end up with a share price of $49, which is well past my selling target. That math is convincing enough for me to jump in.
So South Dakota, how about giving me some quatloops…or maybe just some cold hard CASH when I go to the pay window and sell this stock.
I am HUGE!
$$$MR. MARKET$$$
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