Coastal Financial: Latest Discovered Financial Smallcap

Includes: CFCP, NMIL, NREB
by: Eddy Elfenbein

Eddy Elfenbein submits: As long-time readers know, periodically I’ll write about little-known stocks that have strong businesses, but are unheard of on Wall Street. I’ve never understood why everyone wants to own the next Google or Apple, instead of investing in proven, well-run businesses.

Last year, I mentioned three micro-cap financial stocks: NewMil Bancorp (NMIL), Northern Empire Bancshares (NREB) and Coastal Financial (CFCP). These are all great stocks, just no one knew about them.

Well, someone found out. In April, NewMil was bought out for a 41% premium. Then in September, Northern Empire agreed to a buyout for a 22% premium. The only one left was little Coastal. I was still a fan. A few weeks ago, I even mentioned CFCP as a contender for the 2007 Buy List.

Today Costal announced that it’s being bought by BB&T (NYSE:BBT) for $395 million or $17.04 a share. That’s an 18% premium to yesterday’s close.