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The Scepticist

 
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  • Parke Bancorp: A Chronically Undervalued Financial Stock (Part II) [View article]
    This remark tends to come back. The truth is that they were loaded with loans to the Comercial Real estate and Construction & Development sectors in 2008. Other banks reported monster losses, while Parke had an extremely risky loan portfolio. Still they reported a profit in 2008. So did they pull a rabit out of their sleeve? Well....

    One and a half year later their balance sheet gets fueled with NPA's and Texas ratio quickly rose to almost double of the national average. As explained above an NPA is an unrealized loss waiting to happen. If that wasn't enough, Texas Ratio kept on rising until Q32012 while national average was trending downward. So they were taking the hit later.

    So did they dodge a bullet in 2008? I don't think so. The pain got delayed as NPA's/Texas ratio started rising very fast in Q12011. Parke has booked very high provision expenses in subsequent years so in my eyes they just spread that monster loss over the coming years . As explained in the article the 2008 heritage is far from completely digested as the bank still has a Texas ratio of >50%.

    The real question is: "why the delay?". NPA's came flooding in at Q42011. The fact is that the bank took TARP way before that in 2009. Would you sign up for very expensive
    TARP, equity if your balance sheet is all sunshine and hapiness (especially since management has a very high stake)? My guess is that they kept appearences high deliberatly, while waiting for the economic environment to improve, because lets face it... they very close to a melt down.
    Feb 14, 2014. 04:12 PM | Likes Like |Link to Comment
  • Parke Bancorp: A Chronically Undervalued Financial Stock (Part II) [View article]
    For some reason it was in my head that average peer efficiency ratio was around 50% while it is more like 77%. I think my brain switched of here for a second. So yes, I'm wrong here!

    In my defense, the angle of the article was the asset quality rather than the income statement. But I felt I had to mention something about it anyway, and probably went too fast over it.Thnx for clearing that out.
    Feb 12, 2014. 01:56 PM | Likes Like |Link to Comment
  • Parke Bancorp: A Chronically Undervalued Financial Stock (Part II) [View article]
    Blackhawk Bancorp:

    Less risky: better asset quality
    1.Significantly less Oreo
    2.Significantly less NPL's
    3.Texas ratio =16 % (compared to Parke's 58%)
    4. Loan portfolio has better spread, less risky sectors

    Poor profitability
    1. Low net interest margin (supported by less risky loan portfolio)
    2. Low ROA (0,5% vs Parke's 1,1 %) -> low ROE
    3. High efficiency (= peer average).
    Feb 12, 2014. 01:45 PM | Likes Like |Link to Comment
  • Parke Bancorp: A Chronically Undervalued Financial Stock (Part II) [View article]
    they fixed it! :)
    Feb 11, 2014. 03:33 PM | Likes Like |Link to Comment
  • Parke Bancorp: A Chronically Undervalued Financial Stock (Part II) [View article]
    All graphs I made with Excel got lost in publishing.

    This really takes away the point of the article!

    Great job Seeking Alpha!
    Feb 10, 2014. 01:58 PM | Likes Like |Link to Comment
  • Delhaize: A Retailer With A Lot Of Problems, But Still Worth A Buy [View article]
    Define "not very good". The company has a Net Debt/EBITDA of 1.2!
    That's pretty solid in my books!
    Dec 27, 2013. 06:34 AM | Likes Like |Link to Comment
  • Delhaize: A Retailer With A Lot Of Problems, But Still Worth A Buy [View article]
    Dieter, thnx for the article. Can you give your opinion on the following?

    1) Operating margin in Belgium took a hit in Q3. Why was that?

    2) How do you think future revenue and operating margin are going to evolve for bolth key markets (Belgium and US)?

    3) You correctly point out that Delhaize operates in the mid-high cost segment. How do you think the company will respond to competitors like Eldi and Albert Hein, who gain market share in this segment.

    4) What will be new managements angle? (will they go on the acquisition tour? sell segments? )

    I agree with the authors view that the company is very reasonably priced: P/FCF<10 and 4x EV/EBITDA.
    Dec 27, 2013. 06:31 AM | Likes Like |Link to Comment
  • Best Ideas For 2014: Long GCVRZ [View article]
    I'll quote Charlie Munger: “At Berkshire we have three buckets: yes, no and too hard. We just throw some decisions into the ‘too hard’ file and go onto the others.” .... guess what bucket I'm gonna throw this one in ;-) ?
    Dec 25, 2013. 04:52 AM | 2 Likes Like |Link to Comment
  • Awilco Drilling: A Sustainable 22% Dividend [View article]
    Interesting posts guys ... I appreaciate your concerns so here's mine:

    How reliable are the statements as every company presentation says their numbers are unaudited. Are the annual reports audited or am I missing something here?
    Sep 23, 2013. 02:45 PM | Likes Like |Link to Comment
  • Update To My 50 Predictions For 2013 [View article]
    Highly entertaining post! GJ
    Aug 4, 2013. 05:06 PM | Likes Like |Link to Comment
  • ArcelorMittal: The Reversal Is Coming [View article]
    Low P/B, yet equity can get serious hits over the next years while restructuring debt. I do agree MT has value in the long term, but like most here I'm cautious for the short/mid term.

    I suggest a hedged exposure: Long on MT, while going short on Thyssenkrupp. Just a tought!
    Jul 13, 2013. 07:38 AM | Likes Like |Link to Comment
  • Longwei Petroleum (LPIH) Dismisses Legal Action Against GeoInvesting Et Al. [View instapost]
    Congratz!
    Jun 29, 2013. 04:38 AM | Likes Like |Link to Comment
  • Parke Bank: A Cheap Small Bank [View article]
    @rubicon59

    No-one can tell you what their OREO is worth. All I can tell you is that they started inheriting OREO since 2010 (see balance sheet). If you look at the following link, the average house prices actually rose since Q1 2010. So who says OREO isn't worth more than on the balance sheet? My guess is recent growth of house prices will prevent losses (not accounted for the lawyer cost wich are calculated in their quarterly reportings) and accelerate a further decrease in OREO. http://econ.st/16iVHlW

    About the provisions:

    You are right, they can understate provisions, but they can't understate % allowance for loan losses/NPL's. (Provisions go in the allowance saving jar). If they can keep % allowance/NPL constant and let OREO decrease at the same time while decreasing provisions.... then it can only mean provisions are NOT understated. My guess is they use a reactive approach to determine provisions: they book provisions to exactly (or almost exactly) compensate for new NPL's in latest quarter !
    This approach does not reflect the LT-risk of new loans. But I doubt they will be placing a LT-bomb under their feet for ST-profit if management's shareholdership is about 40%
    Jun 13, 2013. 12:33 PM | Likes Like |Link to Comment
  • Parke Bank: A Cheap Small Bank [View article]
    Great article! Was thinking of writing an update on Parke but you beat me to it.

    Some toughts:

    Don't see why you should discount deferred tax assets from the its net tangible assets? Unless they will never make a profit again, these assets will soon be converted to cash.

    What you didn't mention in your article is the evolution of the allowance for loan losses. The evolution of NPA's (bolth OREO and NPL) is stabilizing (even slightly decreasing). They are also reporting a profit increase mainly due to the decrease in provisions costs. This while % allowance over NPL's is stable (even slightly increasing). Booking less provisions while maintaining a constant % allowance clearly indicates a positive trend in the quality of its loan portfolio. This trend was notable in last 2 quarters and will almost certainly be continued the next two quarters. The reason is the improvement of the US housing market and the recovery of the US economy. Parke remains a great play on the recovering housing market in the US
    Jun 12, 2013. 04:53 PM | Likes Like |Link to Comment
  • Interoil: Let's Get Ready To Fumble [View article]
    Does anyone else has the feeling he's sitting at the side of a legendary texas holdem poker game with alot of chips on the table?

    I'm watching bolth remaining players but I can't see wich one is bluffing. The stack on the table is growing larger and larger as neither party is giving up bidding. I guess we're gonna have to wait for the show down.

    One thing is certain... I folded a long time ago... seems like the smartest thing to do. I comitted to investing rather then gambling!
    May 17, 2013. 10:39 AM | Likes Like |Link to Comment
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