Gregory Vousvounis
Value, growth at reasonable price, long-term horizon, long only

Simplicity Bancorp: An Overcapitalized Bank Ripe For A Takeover

Investment Thesis

Simplicity Bancorp (NASDAQ:SMPL) formerly known as "Kaiser Federal Financial Group" is the holding company of a small community bank. SMPL is trading at a 13% discount to its BV and while it may not be obvious, it is significantly undervalued relative to its private market value.

Here are the reasons why Simplicity deserves a higher valuation:

    SMPL is trading at $15.79/share which is slightly below its BV of $18. It has a quite overcapitalized balance sheet with equity being 17.26% of assets (compared to an industry norm ~10%) and its 1 ratio being a very high 20%. Return on equity and net interest margin have languished due to the company's overcapitalized balance sheet but it can...
Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details