Sell
BofI (BOFI)
from Upside, recommended at $24 in the August 30, 2012 Daily Alert and in Investment Digest issue 726.
BofI is being dropped to Sell based on its sharp run-up and stretched valuation. The stock has gained 139% this year and trades at 22 times trailing earnings — well above its 10-year average P/E of 15. The Quadrix Value score of 28 is below the banking industry average of 61, suggesting the stock could be vulnerable if growth stalls. While the online bank has delivered strong results in recent quarters, the prudent move is to lock up gains and sell the stock. BofI was initiated as a Buy at $23.52 in August 2012 and upgraded to a Best Buy at $26.27 a month later.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, November 4, 2013