Investors Bancorp (ISBC) is a Misunderstood Bank Stock - Barron's
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Over the weekend, writers at Barron's highlighted an "opportunity" in Investors Bancorp (Nasdaq: ISBC) stock. The report called it a well-run, well-capitalized and growing bank selling at a discount price. This is a compelling argument, for sure, but if the stock is such a great deal why haven’t investors noticed it before?
The problem, notes the article, is the bank's misunderstood ownership structure. Investors Bancorp is part public and part mutually held, similar to the way the old thrifts were structured. By the end of the year, Barron's says management will announce an offering for the rest of the equity. With the misunderstood structural no longer an issue for investors, the bank's stock could pop. At that point it should trade at a valuation that is closer to its peer, which trade at 127 percent of tangible book vs. Investors Bancorp, which trades at 94 percent of tangible book.
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The problem, notes the article, is the bank's misunderstood ownership structure. Investors Bancorp is part public and part mutually held, similar to the way the old thrifts were structured. By the end of the year, Barron's says management will announce an offering for the rest of the equity. With the misunderstood structural no longer an issue for investors, the bank's stock could pop. At that point it should trade at a valuation that is closer to its peer, which trade at 127 percent of tangible book vs. Investors Bancorp, which trades at 94 percent of tangible book.
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