District Banker

When Bank of Hawaii Falls Below 52-Week Low, It's Time to Buy

You can spew all the nonsense you wish about what charts did this time and that time, but I prefer to study the fundamentals of the company. With this name, it's not too difficult...

As its name indicates, Bank of Hawaii conducts the majority of its business in Hawaii (they do also have some home equity products available in the continental US, as well as some amount of presence in places like Guam, where US military is established). So since substantially all of its business is in Hawaii, let's look at the Hawaiian economy. A massive driver of that economic engine is none other than tourism. I don't know very many people packing up their spouse/kids/parents and heading off to Hawaii, these days.

The reduction in tourism will likely be enough to create some problems in some of their lodging CRE credits. I don't expect to see horrific problems, but when you're trading at a lofty (for banks) valuation of 240% TBV, you give up the luxury of showing credit problems. If you do show them, you lose your "safe haven" label, and investors will generally sell your stock down to a more reasonable (sub 200%) multiple of TBV.