With both assets and loans growing at double-digit rates, this bank may be growing closer to a takeover.
Avid Bank Holdings (AVBH)
from Hughes Investment Management
Avid Bank Holdings (AVBH) continues to grow strongly, in the fast-paced high tech market. The bank still has almost zero charge offs for bad loans. The management seems to be working hard and the bank is in the right markets, at the right time.
A deal for this bank should come in the next few years at a 40% premium. Management owns a ton of shares and I feel will someday sell out. Earnings power at this bank is double its current level, creating a sale price of around $17 a share.
The downside is limited, unless we get a severe tech sell-off. I believe management will sell out before this happens.
Continue to add to this name strongly below $12.75.
Douglas Hughes, Hughes Investment Management, www.banknewsletter.com, 888-814-7575, June 22, 2015