NewStar May Be Acquired And Rise Strongly; If Not, Another Down-Leg Is Likely
- NewStar Financial is a specialty lender with around $2.5B in assets that has a limited growth potential.
- With steady profits in the last three years, along with a clean balance sheet, the company seems to stay on the radar of larger banks.
- Share prices have been in a downtrend since December, and have lost around 45% of its value as sale expectations have failed to materialize.
- If the company intends to remain independent it has to struggle and most probably get a new business plan.
- If NewStar agrees to be sold in the short-term it may be worth around 1.4x book value, or $17.80 per share - a 55% upside.