Issue 7: Small/Midcaps

In looking over the industries offered in this issue, I was disappointed.  There were semiconductors, electronics, life insurance, and thrift banks.  To date, I still do not understand how to value banks or insurance companies, and I am staying away from electronics (in general) as well as semiconductors.  I ended up doing a cursory glance over every company and ended up analyzing only 2 of them.  One is a great business:

  • Aaon Inc- air conditioning & heating equipment

and the other is an interesting situation:

  • NASB Financial- thrift bank in Missouri & Kansas

You may be wondering why I am posting about a bank if I do not understand them at all.  I remember awhile back when Buffett talked about a certain profitability measure for banks and this one meets that requirement.  It is also at a pretty good price to cash flow.  I figure I’ll check it out and see if I can understand it at all.

UPDATE: NASB Financial got into mortgages & has pretty difficult-to-value assets on the balance sheet.  I can’t necessarily take the numbers to mean what they’re saying… is it too much to ask for a simple S&L Bank that I can understand? Perhaps I’m not meant to understand this industry… Not interested anymore however.

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About Andrew Schneck

I am a value investor focused on misunderstood securities and industries, with an eye for long-term stock ownership.
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