Thomas Eidelman, Portfolio Manager at Eidelman Virant Capital, says his firm looks for companies with great management and strong market positions trading at low price to book, low price to earnings ratios, or low industry-specific multiples. The firm finds such characteristics in small banks like Pacific Premier Bancorp, Inc. (PPBI).
“One of our largest holdings and favorite banks is Pacific Premier Bank based in California. Steve Gardner took over this bank a few years ago. He is an aggressive marketer and fantastic manager; he is an outstanding operator that is trying to outwork his competitors,” Eidelman said.
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Eidelman says that as one of the few publicly traded banks in California, Pacific Premier is creating scarcity value.
“Anybody who wants to get into California market is going to look at potentially buying Pacific Premier,” Eidelman said. “We think PPBI could earn $1.40 next year and should trade at 15 times those earnings based on their markets, management quality and competitor valuations resulting in a price target of $21 per share, a 50% premium to the current price of $14.”
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