Hello fellow Sharks,
Here is the latest update on one of the positions in the portfolio.
Short version: results were great, execution is exactly what the thesis called for, and the stock is up a mere +4.6% since I added it to the portfolio.
That mismatch, between what the business is doing and what the market is paying, is the entire trade.
This quarter delivered a double-digit EPS beat versus consensus, double-digit revenue growth, another consecutive quarter of zero provision for credit losses, a meaningfully stronger capital position, and a management team that, for the first time in years, put buybacks back on the table.
And yet, the stock still trades at single-digit forward earnings and roughly 1.6x tangible book for a business earning 20% on tangible equity with zero debt at the holding company.