Learning to Love BOGO

For most of my life I have been blissfully unaware of coupons and other methods of bargain shopping at the grocery store. I walked into the store, bought what I wanted and walked back out. I didn’t comparison shop or think about price. I wanted it, I could afford it so I bought it. It drive my wife crazy as she was very bargain conscious and compared prices carefully. Then I moved to Florida and started doing my shopping at the Publix chain of grocery stores. Publix is the king of the buy one, get one (BOGO) method of luring shoppers in to take advantage of bargains. I did a lot of the shopping so I was in the store frequently and I became hopelessly addicted to the BOGO. Soon we were pretty loaded up with extra peanut butter, a near lifetime supply of spaghetti and potato chips of a quantity sufficient to survive a second potato famine. You could even buy wine BOGO. I learned to love the BOGO.

IN the spirit of bargain shopping I have a BOGO offer for you. Recently I started offering two new monthly services. These two newsletters will help you find the safe and cheap stocks that can help you earn outsized long term returns. Normally they are $99 each for the year which is a bargain in and of itself. But I am going to do a BOGO. You can get the Banking on Profits and The Bottom Decile Report bot for just $99 for a full year.
The Bottom Decile Report takes its name from a habit in academics where stocks are put into groups of 10%, or deciles, when studying valuation factors and performance. In the case of the Bottom Decile Report, the bottom 10% are stocks with the lowest measure of “price to tangible book value”. This is comprehensive, monthly newsletter will provide you one of the most in-depth reports of value investing around.

Drawing on almost three decades of experience and the geek tradition of reviewing as much significant academic literature surrounding the market as possible, I’ll be finding cheap stocks with strong financials Each month you will receive a shopping list of the “bottom decile stocks” that have potential to survive until they thrive…and of course, deliver strong returns for the patient value investor that you are (or should be!).

The Banking on Profits Monthly covers all things related to the small regional and community banks. This sector offers what I think is one of the greatest opportunities for long term investors to earn huge returns. I call it the Trade of the Decade. This letter will help you find those little banks that are raising dividends, buying back stock and other shareholder friendly actions. You will see each month which little banks are seeing buying from officer and directors. I will identify which ones are seeing buying from smart money and activist investors. Each month you have the information you need to find those stocks that will benefit from the social and economic trends that will push small bank stocks higher for years to come.

Having both of these letters each month will make you aware of all the opportunities that exist among deep value and community bank stocks. Now you can get them both for just $99 in MY BOGO offer.

I hope you join us and start exploring the worlds of deep value and community bank stock investing.
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in the search for undervalued stocks that can help you find the low risk high return stocks you want in your portfolio!

The Fed and CEOs are Telling You What to Buy. Are You Listening?

The world of banking, especially community banking, is changing rapidly.
As Fed Governor Jerome Powell said in the opening section of the recent Community Banking Community Banking in the 21st Century Paper released last month, “For many community banks, the past year has been one of significant improvement. Bank balance sheets have strengthened, with notable reductions in problem assets. Liquidity remains ample, with many banks actively competing for prime lending opportunities. Yet despite this progress, community bank earnings have not returned to pre-crisis levels, and many banks feel burdened by the challenges of new and changing regulations.”

It was noted in the report that, “Comments from survey respondents link reasons for considering acquisition offers to regulatory burden.” One banker said, “The appearance that institutions of our size may not be viable in the future.” Additional comments communicate personal reflections of operating community banks under what bankers perceive and as an excessive regulatory burden.

One comment mentioned management fatigue and another respondent said, “Banking is not fun anymore.”

Twenty percent of respondents to the Fed Survey expect to make an offer next year and another 20 percent expect to be the target of an acquisition offer in the next 12 months. The M&A wave in community banks is real and it has started.

Many of the bank CEOs have recently express the same view of the industry.

Northfield Bancorp, CEO John Alexander

When asked about the prospects of a looming merger wave Northfield Bancorp (NASDAQ:NFBK) CEO John Alexander said “In large part, I think it is already here. If you look at the number of transactions in 2014 and even in 2013, it has been increasing. One thing to keep in focus too is that back two, three, or four years, many banks were selling below tangible book value. As things have improved, banks are beginning to sell in the 130 to 160 percent of tangible book value range, with some even higher. Think about the current environment — yields are low, lending rates are super competitive, and costs are rising costs such as compliance, Bank Secrecy Act and Anti-Money Laundering, and more recently risk management. The pressure on earnings is endless. A lot of smaller banks are looking at all of this and coming to the conclusion that it makes sense to sell or “partner up.”

Related Link: The Most Boring Way To Make Money In The Stock Market

Hometrust Bancshares, CEO Dana Stonestreet

CEO Dana Stonestreet of Hometrust Bancshares (NASDAQ: HTBI) recently observed “The volume of regulatory change has been unreasonable and somewhat unproductive. At a time when banks still need to be taking care of customers, it makes it harder to take care of customers.” The CFO of the bank, Tony VunCannon, commented. “That will be a driver for continued consolidation as well. You’ve got many factors there, but that’s another huge factor for smaller banks, because how in the world can they keep up with it?” When asked specifically about the future of community banks Mr. Stonestreet added “We think consolidation is just going to be continuing to ramp up. It is so challenging to be a small bank in this current environment with the expense of being in the banking business. The government won’t admit to the fact they’ve raised the bar significantly on the size you need to be to be in this market.”

Pacific Mercantile Bancorp, CEO Steve Buster

CEO Steve Buster of Pacific Mercantile Bancorp (NASDAQ: PMBC) has a similar view of the future but sees a strong opportunity for the surviving community banks as well. He told us “For the small community banks, I think they will capitulate to consolidation with larger banks. It won’t be the big banks buying them, but there will be a consolidation to the multi-billion dollar smaller banks by the $500 million and less community bank. I think that is a wave. Secondly, the community bank population has shrunk so much that I feel there is a real opportunity for the remaining survivors to fill the niche of what clients really want. I think we’re going to have a very healthy environment for some years.”

ESSA Bancorp, CEO Gary Olson

CEO Gary Olson of ESSA Bancorp (NASDAQ: ESSA) in Pennsylvania sees a similar scenario for the little banks. In a recent interview he told us “When I started, which was three or four years prior to Reagan deregulating the business, there were about 20,000 banks and now we’re just shy of 7,000 banks. Even in our own market, we’ve witnessed a number of banks leaving the marketplace… Again, we have structured the company to be independent for the long term and we actually say that in our values. So, I think the ESSA continues to weather whatever storms might be out there. Through four big problems in my career, we’ve seemingly figured out a way to be here to weather all those storms and my guess is that there’s going to continue to be some fallout in the industry. There are currently 6,700 to 6,800 banks, and like others, we think there’ll probably be less than 5,000 banks in another ten years or less. People just get tired and boards get concerned that the values continue to shrink and they take their payday while they can and that’s the end of it.”

Investors should listen very carefully to what the Fed and the people running the community banks across the U.S. are saying.

The landscape is changing and many of these banks are going to be pretty much forced to sell to a larger institution. Since the average takeover multiple right now is about 1.3 times book value buying shares in these little banks at 85% or so book value and less equals an enormous opportunity to make a lot of money.

Those banks that do find a niche or can dominate their local markets with superior service and localized knowledge will perform very well going forward. These Darwinist (survival of the fittest) banks should see earnings, book value and dividends grow at a strong pace and drive the stock price a lot higher over the next decade.

The Trade of the Decade is here, it is real and it is happening now. It will continue for years to come as the banking industry continues to change. The only question is are you going to get your share of the large profits that investors will experience in this sector. Banking on Profits can help you take advantage of this huge opportunity. As a member of Banking on Profits you get:
As a Banking on Profit subscriber, you’ll enjoy:

Real-time Recommendations: Each trade is chosen due to its potential to multiply your profits. The moment Tim finds an opportunity, he’ll send a real-time buy alert straight to your email inbox.
Plain-English Commentary: Tim also emails you with easy-to-understand details on why he thinks the stock has the potential to soar.
Weekly Insight and Analysis: You’ll receive weekly insight from Tim on everything banking- and deep-value related. As well as what small stocks he’s eyeing, which ones are surprising him with their earnings reports, and potential opportunities in the sector.
Full Access to Tim’s Independently Verified Portfolio: You’ll get full range to view his previous recommendations—including up-to-date growth and portfolio returns.
Exclusive One-on-One Messaging: Tim is available to answer any questions you have about banking sectors, current opportunities, or value investing in general. You can also message him to ask whether there’s still time to get into previous recommendations. Either way, you get unlimited access to Tim Melvin’s nearly three decades of industry experience!
“Insider’s access” to the Banking Industry: Tim’s ability to analyze disclosures gives him enormous insight on nano-cap stocks flying under Wall Street’s radar. You won’t find information on these “little guys” anywhere else!

You also get My Banking on Profit Monthly Service free. This includes:
A copy of Banking on Profit’s monthly newsletter
An outlook of the entire banking sector
A breakdown of all rumors and potential takeovers in the banking sector
Recent merger and acquisitions worth noting
Important dividend and buyback opportunities and news
Insider activity happening in the sector
Industry related moves made by major institutions
A monthly list of important and relevant reading material.

Please Join us today​ at Banking on Profits and discover the most boring way to get rich in stocks.

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Ps Tired of all this volatility? Community Banks are not in the heavily traded indexes and ETFs that whip the market around. Out portfolio is pretty much flat on the day today!