Yuanxi Zhang
Long/short equity, value, special situations

Prudential Bancorp Of Pennsylvania Is Attractively Valued With Imminent Catalysts

Recommendation: Long Prudential Bancorp of Pennsylvania (NASDAQ:PBIP)

Catalyst: Favorable terms for second-step conversion in Q4 2013; buyout after three-year memorandum

Price: $9.77 Market Cap; $97.9 million (counting MHC shares)

Target price(6 month) :$12.94


Prudential Bancorp Inc of Pennsylvania is a misunderstood stock. The stock are seemingly expensive at 40x PE and 1.7x PB shown on all the financial websites. However, its low valuations are distorted by the Mutual Holding Company structure. Although the management is mediocre at best, the company has a strong balance sheet. The recently announced second-step conversion would be a positive catalyst to the company by infusing substantial cash and enhancing shareholder values. In the long-term the company is attractive as an acquisition candidate...

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