This Top Pick has posted some great gains so far this year. And soon, the dividend may increase, and a buyout is not out of the question.
First US Bancshares, Inc. (FUSB)
From Contra the Heard Newsletter
First US Bancshares, Inc. (FUSB), a deep-rooted bank founded in 1952, has jumped about 16% since we selected it at the beginning of the year. We think that there is much more ahead as it seems reasonable that better than a double is in the cards.
In the past, when it was a smaller bank, it traded above $25. With the recent takeover of The Peoples Bank, there is an excellent chance that both revenues and the bottom line will fatten.
In addition, the dividend, which currently rests at $0.02 a quarter may increase. It did hit $0.27 quarterly prior to the recession and while that is a leap beyond current expectations, a double or triple in the payout before the end of 2020 seems reasonable. That would almost assuredly push the stock price up.
Financial ratios for this bank are excellent. The stock still trades well below the book value of almost $13. Insiders own about 5.8%. The same steady CEO, James House has guided this enterprise since 2011. It would not surprise at all to see a larger enterprise swoop in and take over FUSB with its 20 branches.
Benj Gallander, Contra the Heard Investment Letter, gall@pathcom.com, www.contratheheard.com, 416-410-4431, June 18, 2019