A Record Quarter, a Stock Still Trading Like Nothing Happened

Record quarter, stronger balance sheet, M&A optionality now live. Here is what actually drove Q1, what management said, and what to watch as the NIM tailwinds fade.

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.