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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Preferred Bank (XNAS:PFBC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PFBC
Name:
PREFERRED BANK (XNAS:PFBC)
Sector:
32.05M
Industry:
Banks�Regional
CEO:
Mr. Li Yu
Total Employees:
279
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PREFERRED BANK(PFBC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
67.57
One Month Price Target:
$68.01
Six Month Price Target :
$70.19
Likely Price in One Year's Time:
Ticker:
$72.81
Likely Trading Range Today Under (Normal Volatility)
$67.28
Price Upper limit ($) :
$67.96
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$63.47
This week:
$58.41
This month :
$49.25
Other Primary facts
Market Cap:
955.58M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
14.36M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.58%
-19.11%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$86.57
$77.82
$48.57
$57.32
Medium risk (<10%) entry points
Buy Call
Sell Call
$74.98
Buy Put:
Sell Put:
$73.11
$60.14
$62.03
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PFBC
Sharpe Ratio:
2.10%
Comparison:
PFBC, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 71.09% higher than the industry
& is -7.79% lower than the market/S&P 500 average
Average Returns/Yield of
PFBC
Daily returns:
0.07%
Weekly returns:
0.36%
Monthly returns:
1.43%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 57.51% above industry average
Classification:
PFBC, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.61
Statistical test of Returns:
PFBC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.99%
Weekly Volatility:
6.68%
Monthly Volatility:
13.35%
Yearly Volatility:
46.26%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.34%
Volatility in last five trading days has been -88.45% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.06%
Weekly VaR:
-13.55%
Monthly VaR:
-27.11%
How Much Can the price of
PFBC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-93.90%
This translates to price declining to:
$51.93
This translates to price declining to:
$4.12
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PFBC is a 91.31% riskier investment compared to the market/S&P 500 & is 63.90% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 4.53% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PFBC
Beta in relation to market/S&P 500--1.15
Expected beta in 1 year's time:
0.82
Expected beta in 3 year's time:
1.16
Unlevered (debt free) Beta:
0.959
Beta in relation to Nasdaq (XNAS):
0.589
Beta in relation to all global stocks::
0.905
Beta Comparison & Analysis
Beta of competitors/peers::
1.114
Beta is 3.64% higher than peers
Average Industry Beta:
0.964
Beta is 19.76% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.14%
Sustainable growth rate is 32.97% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.061
Alpha is 428.39% above industry average alpha yield
Alpha is 390% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PFBC
Equity cost of capital:
0.111
Equity cost of capital is 13.38% above industry mean WACC
Unlevered (without debt) cost of capital:
9.19%
Before-tax cost of debt:
13.75%
After-tax cost of debt:
10.86%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
10.86%
WACC is -3.82% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$13.88
Revenue growth rate per share of (3Y):
1.63
Annual revenue growth rate is -31.90% below industry average
EPS:
$6.73
Expected Annual growth rate of EPS (3Y):
7.50%
Expected future EPS growth rate is -37.63% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$7.93
Balance sheet equity growth per share: 38.70%
Equity growth rate per share is -0.05% lower than the industry
Debt per share
$11.82
EBITDA per share
$11.55
Valuation Analysis Today of
PFBC
P/E Ratio:
9.43
P/E Ratio of Competitors/Peers:
11.37
P/E ratio is -17.06% lower than main peers & is -24.02% lower than the industry
Stock price/value with industry average P/E ratio: $83.51
PFBC is -19.09% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $42.95
Present value of the expected future dividends only: $25.49
P/S (Price to Sales ratio):
4.87
Price to sales ratio is 13.86% above the industry mean
P/B (Price to book value ratio):
1.63
Price to free cash flow: 8.52
-
Net income growth rate (3Y):
35.70%
Net income growth rate is -35.17% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.31%
Dividend yeild: 2.40%
Previous Dividend: $0.43
Previous adjusted dividend: $0.43
Previous Dividend: $1.62
Expected next dividend best case: $0.48
Expected next dividend worst case: $0.38
Average dividend payment (long-term): $0.35
Average dividend increase/decrease (growth rate) % per period: 4.42%
Expected next dividend payment date: 20/07/2022
Expected next dividend record date: 07/06/2022
Expected next dividend declaration date: 14/06/2022
Previous dividend payment date: 21/04/2022
Previous dividend record date: 04/07/2022
Previous dividend declaration date: 16/03/2022
Dividend History:
2022-04-06--$0.43
2021-10-06--$0.38
2021-04-06--$0.38
2022-01-06--$0.43
2021-07-06--$0.38
2021-01-06--$0.30
Dividend growth rate is -81.24% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
28.51%
Net debt to equity ratio:
-133.62%
Debt to assets ratio:
2.76%
Net debt to assets ratio:
-12.95%
Debt-to-asset ratio is -98.34% below industry average
Ability to repay debt:
Interest coverage ratio:
7.11
Interest coverage ratio is 757.45% more than industry average
Looking forward:
Debt growth rate:
44.57%
Annual debt growth is 13974% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.493
Statistical significance of correlation:
PFBC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is -1.62% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
0.032
Covariance of price movement with the market:
0.056
Kurtosis
9.122
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.086
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PFBC
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
28.81%
Effective tax rate is 33.72% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.81%
Return on equity (ROE) is 40.92% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.63%
Return on assets (ROA) is -29.30% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 8.0 years
Stock based compensation to net income ratio:
1.38%
In-depth Efficiency Analysis
Revenue generated per employee:
714.1K
Each employee generates 88% more revenue than industry average revenue per employee
EBITDA generated per employee:
594.4K
Each employee generates 163% more EBITDA than industry average revenue per employee
Profit generated per employee:
358.7K
Each employee generates 153% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
114.9K
Each employee generates 38% more free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates 38% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PFBC
HERITAGE FINANCIAL CORPORATION (XNAS:HFWA)
ORIGIN BANCORP, INC. (XNAS:OBNK)
MIDCAP FINANCIAL INVESTMENT CORPORATION (XNAS:MFIC)
FTOC
METROMILE, INC. (XNAS:MILE)
KEARNY FINANCIAL CORP. (XNAS:KRNY)
Calamos Conv Opp Inc (XNAS:CHI)
COWEN INC. (XNAS:COWN)
LANDCADIA HOLDINGS IV UNT (XNAS:LCAHU)
Current Analyst Ratings
Strong buy�13%
Buy�13%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
199.23M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
45.65M
45.65M
-
-
-
213.90M
23.34M
1.93M
165.84M
-
100.07M
140.58M
40.51M
100.07M
Statement of Cash Flow
Date:
Period:
486.00K
Differed Income Tax :
-
Stock Based Compensation :
1.38M
Change in Working Capital :
3.01M
Accounts Receivables:
- 3125.00K
Other Working Capital:
-
Other Non-Cash Items:
1.28M
Net Cash Provided by Operating Activities:
32.19M
Investments in PP&E:
- 142.00K
Net Acquisitions:
-
Purchases of Investments:
- 7000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
965.16M
430.28M
1.40B
15.17M
-
-
-
31.64M
-
-
500.72M
-
-
-
6.14B
6.14B
1.97M
-
-
-
-
-
169.72M
-
169.72M
5.72B
5.55B
210.88M
392.61M
- 6390.0K
- 1817.00K
March 31, 2022 at 6:00:00 AM
-
595.29M
6.14B
931.00M
169.72M
- 795443.0K
13.14M
- 180323.00K
- 174324.00K
-
-
- 1159.00K
- 6312.00K
84.16M
76.69M
-
- 65448.00K
985.16M
1.05B
32.19M
- 142.00K
32.05M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
PFBC
2023
2024
2025
2026
2027
$83.12
$89.56
$96.51
$104.00
$112.06