Deep Value, event-driven

FBR & Co.: 2.9x Ex-Cash Earnings With Efficient Cost Structure Means 70-85% Upside

FBR & Co. (NASDAQ:FBRC) is an investment bank and institution brokerage firm headquartered in Arlington, VA. Despite rising about 55% in 2013, shares of FBRC continue to offer an exceptionally asymmetric return profile.

2013 Results

FBR earned $92.9 million in 2014, but this figure was inflated by the use of $27.5 million in NOL benefits and some $8 million in remaining revenues from the sale of its mutual fund business. Below are FBR's adjusted '13 results:

In millions, *adjusted net income is defined as pre-tax income from continuing operations, taxed at a 40% rate (long-term guidance from management)

Adjusted Results* Revenue Net Income Q1 $118 $21.6 Q2 $67 $8.8 Q3 $34 $1.9 Q4 $41 $2.2 FY13 $260 $34.5 ...
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