tag:blogger.com,1999:blog-2149523431587168680.post5063224126933883760..comments2024-01-16T00:12:23.220-05:00Comments on Oddball Stocks: Sunnyside bank, severely undervalued on the cusp of a turnaroundNate Tobikhttp://www.blogger.com/profile/05660387777171986124noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-2149523431587168680.post-23776495686242978652015-09-08T10:48:15.829-04:002015-09-08T10:48:15.829-04:00As a customer of this bank and many other banks- I...As a customer of this bank and many other banks- I find NOTHING going for this bank that deserve mention EXC EPT your figures that a buyout from another bank can make sense. WHile you glossed over the fact that this bank had to go from MUTUIAL to Stock mainly because it was losing money the fact that stockholders now have to make that up instead of its customers is no solace. Holding this banks stock for some kind of buyout may be not a reason to buy the shares as long as the bank itself has at its core a very limited banking services and simply poor business practice. This bank has very limited services, has restrictions on loan amounts to each customer of like a million dollars or slightly higher. In a neighborhood where houses are 2 and 3 million I fail to see how they can attract business with such limits and furthermore if you had a mortgage with them then your limits may prevent your business from borrowings with this bank so really you move into a this neighborhood and have a business too that they may have limits against you- so why bother starting with this one branch bank. The Loan department has high turnover so you cannot build a relationship- a strong reason for choosing a small bank. The commercial rates and fees are non-competitive. They do not have the ability or resources or wishes to be personal with their customers from a banking relationship. They don't call you if your overdrawn, they probably wont call you if you were late on a payment- so really this small bank has a lot to work on. Management is well entrenched with generous salaries for its board- and I see the board has invested in the bank with enough shares to keep their place and salaries- so realistically a small town bank with small town ideals and limited growth makes for a bad investment. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-66469616823985901652014-09-02T14:55:55.913-04:002014-09-02T14:55:55.913-04:00Sandler O'Neill Asset Management bought a 4.41...Sandler O'Neill Asset Management bought a 4.41% stake (35,000 shares) in the 2Q, making it the second-largest holder after the ESOP, per Bloomberg data. Scott Schnippernoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-22465224508588486212014-09-02T02:22:52.050-04:002014-09-02T02:22:52.050-04:00An edifying post as usual. Keep 'em coming.
T...An edifying post as usual. Keep 'em coming.<br /><br />Thanks!Samshttps://www.blogger.com/profile/13941457520640473102noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-78582620987514106442014-08-30T18:25:58.970-04:002014-08-30T18:25:58.970-04:00Do you use Interactive Brokers?Do you use Interactive Brokers?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-12410724730788742692014-08-29T21:35:41.538-04:002014-08-29T21:35:41.538-04:00Are you concerned with the declining deposit base?...Are you concerned with the declining deposit base? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-59748096256080715192014-08-29T14:40:56.453-04:002014-08-29T14:40:56.453-04:00Nate, it looks like you have the power to move the...Nate, it looks like you have the power to move the market!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-47088708146056177032014-08-29T10:53:27.664-04:002014-08-29T10:53:27.664-04:00This is definitely one of your best finds, and war...This is definitely one of your best finds, and warrants some serious due-diligence. While I know this location — I think it's fair to argue that it's one of the best around (which could have interesting real estate implications) — it isn't within driving distance of me right now. Otherwise, I would do some sleuthing right away. <br /><br />There was another microcap nearby, which I found somewhat compelling: GTAX. They advertise on the MetroNorth commuter trains, and I was surprised to see that they were public. It was recently acquired, and check out the return from '11 onward. <br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-8440922694380917002014-08-29T08:33:34.984-04:002014-08-29T08:33:34.984-04:00Well I'm not a millionaire... you can trade ch...Well I'm not a millionaire... you can trade cheaply in the US. With Interactive Brokers you can trade for $1.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-37740246558333543932014-08-29T05:16:32.032-04:002014-08-29T05:16:32.032-04:00Nate,
Since each bank in the basket would be 1/4 o...Nate,<br />Since each bank in the basket would be 1/4 of a percentage point. With a portfolio of $1mm, you would only have an exposure of $2,500/bank. So either you have a huge portfolio or your trading costs must be extremely low to allow such a basket. Can you please explain?<br />ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-91849297268731769312014-08-28T22:30:27.380-04:002014-08-28T22:30:27.380-04:00It's an ok little bank. I've been in for o...It's an ok little bank. I've been in for only a second. A little old and dusty. <br />If you have some specifics that could be gleaned from on-site, let me know. I can do some DD. <br />Yes, great town to live in. Right on the Hudson. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-41650601440677591152014-08-28T22:28:27.794-04:002014-08-28T22:28:27.794-04:00No problem.
Demutuals are fascinating. I conside...No problem.<br /><br />Demutuals are fascinating. I consider them the net-nets of the finance world, but at the same time they have characteristics of spin-offs. There are a lot that barely earned a dime while mutually owned and suddenly are cranking out profits when public.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-32142472931282766242014-08-28T22:25:04.476-04:002014-08-28T22:25:04.476-04:00That's crazy! I looked the bank up on Google S...That's crazy! I looked the bank up on Google Streetview when I was writing this. It looks like a nice little town, some cool shops and right by the river.<br /><br />Do you have an account there? Is the bank in decent shape?Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-57411424943017296852014-08-28T22:24:10.207-04:002014-08-28T22:24:10.207-04:00I don't know much. In the proxy it says the E...I don't know much. In the proxy it says the ESOP owns 7% and directors and executives own 3.5%. There are no other large holders beyond that.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-9650101515173185872014-08-28T22:05:32.200-04:002014-08-28T22:05:32.200-04:00Nice article Nate. I always enjoy reading your wri...Nice article Nate. I always enjoy reading your write-ups. This one is especially cool because I live literally across the street from Sunnyside Federal. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-52603165114851403732014-08-28T17:26:55.395-04:002014-08-28T17:26:55.395-04:00I know this area very well: the bank is named afte...I know this area very well: the bank is named after Washington Irving's home. <br /><br />Do you know the ownership of the bank?<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-24231381261681930152014-08-28T17:20:23.745-04:002014-08-28T17:20:23.745-04:00Thanks for the thoughtful clarification.
I do rea...Thanks for the thoughtful clarification.<br /><br />I do realize you've made clear in past posts that you are not a mechanical quantitative value investor. I simply enjoy and profit from hearing insightful investors think out loud, especially when net-net and BV asset investors make picks that are not purely backward-looking-mean-reverting. I know others, like Third Avenue, have invested in discount-to-BV stocks like dying retailers with multi-year declining BV and earnings, but I had no access to the finer points of their thinking. SNNY is obviously in a different class, and you've made their case persuasively.<br /><br />It's clear with the de-mutualization that they are highly motivated to grow, and that the odds stack up in favor of growth. SNNY is light-years apart from those "net-net" biotech companies that continually lose money in the hope of a future payoff. Therefore, forward-looking earnings anticipation is not a stretch in this case. So it's not so much a speculation (in it's pejorative sense) as an intelligent investment.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-24840169333237559172014-08-28T15:11:26.718-04:002014-08-28T15:11:26.718-04:00I think you might have a misunderstanding of my in...I think you might have a misunderstanding of my investment process. I don't need a company to be a two pillar company to make an investment. I do prefer those, and have found those types of companies to do well, but most are not.<br /><br />There are no earnings to speak of, but if you look at my conclusion I show that the bank has a pro-forma takeout value that's close to book. So yes, you could say that book value is supported by adjusted earnings to a control shareholder.<br /><br />Even if they don't make any improvements they have value, there is a value to their deposits and their loan book. They could sell the loans for par most likely. <br /><br />On almost any metric you can find they're undervalued, relative, DDM, take-out etc.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-16701672329417611802014-08-28T14:30:50.718-04:002014-08-28T14:30:50.718-04:00Interesting find.
1. Is this pick an exception ...Interesting find. <br /><br />1. Is this pick an exception to your two-pillar strategy when it comes to discount-to-BV stocks, since this is missing the earnings support? <br /> <br />2. If so, are you making the exception because it is a small bank stock and therefore maybe a special case of BV investing?<br /><br />3. Are you confident enough SNNY can achieve these "small improvements" in NIM such that you would not call it a speculation?<br /><br />Thanks for the write-up.Anonymousnoreply@blogger.com