New Capital
Contrarian, deep value, long/short equity, special situations

Home BancShares - The Bear Side Of The Argument

(Editors' Note: This article was revised after publication in response to an error in calculating 2006 tangible book value per share and shares outstanding in the original version.)

I am writing this in response to a recent article on Home BancShares, in which the author suggested further upside for company's share price. I view Home BancShares (NASDAQ:HOMB) already to be significantly overvalued and will provide the bearish side of the argument in this article.

Home BancShares trades at historically high valuations already

P/BV and ROE trends are the first things that I look at when evaluating financial companies. As can be seen from the chart below HOMB already trades at a very high P/BV multiple relative to its...

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