The average analyst target price for this bank is $22--more than double its current price.
First United Corporation (FUNC)
From Contra the Heard Investment Letter
First United (FUNC) has moved up about 20% since first chosen to begin 2015. This year it has only held steady, but the underlying numbers keep improving. If it begins paying a dividend, which we suspect will happen before the end of next year, there should be a boost to both the stock price and returns. In its heyday, it paid $0.20 a quarter.
By virtually every metric, FUNC is undervalued. The book value is better than $14.50 a share. Insiders own about 6.5% and are active buyers. (WSBI Editor’s Note: Insiders recently picked up another 403,000 shares).
The bottom line is profitable quarter after quarter and moving in the right direction. Revenues are trending upwards, and the balance sheet and capitalization ratios are in excellent shape. The company has the same old management that has been in place for a number of years, which is perceived here as a good thing for this enterprise that has been around since 1900.
The Initial Sell Target remains for better than a double on this one, back above the $20 level where it has traded in the past.
Benj Gallander, Contra the Heard Investment Letter, www.contratheheard.com, 416-410-4431, June 20, 2016