This bank’s shares are discounted; it may benefit from consolidation in the financial sector, and recently insiders and institutions have been increasing their holdings, by 1.9% and 5.04%, respectively.
First United Corporation (FUNC)
from Contra the Heard
The stock price of FUNC has been pretty much flat for the first half of the year. This can be explained by a bottom line that has been black, but barely so. However, we continue to see value in this corporation that trades at about two-thirds of book value and had a quarterly dividend of $0.20 in 2008.
Critical to any bank are the capitalization ratios. First United is very strong in this arena. Currently, because of the slim earnings, there is no dividend, but that will likely change before the end of 2016.
During the recession, the share count was not increased like with many banks and it rests at a nominal 6.2 million shares. This bodes well if/when earnings increase as the stock price could move up quickly. Our initial sell target on this company is $21.24. Worth noting is that back in the day it traded for above $25.
It would not surprise to see a competitor move in to nab this corporation, part of the consolidation trend that is happening in this sphere.
Benj Gallander, Contra the Heard Investment Letter, www.contratheheard.com, 416-410-4431, July 6, 2015