Phil Timyan
Long/short equity, bank stocks

Franklin Financial - A Value Stock With Attractive Takeover Potential

One small community bank stock I am bullish on today is Franklin Financial Services Corporation (OTCQX:FRAF) of Chambersburg, PA.

Given the physical locations of Franklin's branches and local market conditions in the area, I believe it's reasonable to anticipate that FRAF is being considered a target for acquisition.

Recent acquisition activity in the community banking sector suggests that a prospective acquirer would be willing to pay 125% of book value for a franchise like FRAF, which would equate to $28 per share - almost double FRAF's current trading price. For example, Renasant Corp (NASDAQ:RNST) just paid that much for First M & F Corp (NASDAQ:FMFC), and FRAF offers prospective acquirers better market share than...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
PRO Top long ideas returned 21.7% in 2016**
"As a PRO member, we get uniquely valuable perspective that go beyond our quantiative analysis... We rely on PRO to get beyond the numbers quickly and add much needed perspective. It keeps me ahead of the next big thing. - Mark Choate, Malaga Cove Capital"
Mark Choate, Malaga Cove Capital
"Contributors (writers and commentators), often have a long history in the secuirities they opine on and some are clearly well positioned industry participants with detailed industry views that can help provide color on where the skeletons are buried in a particular secuirity and/or industry."
Jim Roumell, Roumell Asset Management
Annual subscriptions may be cancelled for any reason within the first 30 days and receive a full and prompt refund. Details