CUBI
I Love CUBI in fact it is my largest position (10% of my portfolio) and probably going to be a long term holding. Admittingly the next quarter ain't gonna be great and the true earnings power of CUBI will be recognized in the second half of 18 after the bankmobile business is spun off which is a money losing business (Because they can't operate it effectively as part of cubi with the 10 billion assets breathing down their neck), then they get back to doing what they do best grow quality assets of.
In a recent 8k, they talked about growing earnings to $4.00 by four years from now, keep in mind the tax bill will add 20% or so to that estimate. A good quality regional like this could trade at 13-15 easily.
I think you will start seeing .80-.85 quarter come q3 and q4 of 18 after the transition period of getting the bank mobile stuff off the books and then they can regrow assets again in 2018. I think 4 years from now we could easily be looking at a company that could earn $4.50-$5.00 in 4 years. Add in the fact that I think bankmobile with more freedom could be a very profitable business in it's own right, which this will occur in 2018 as every shareholder will get a part of this as well. I think this is one of the biggest no brainers going and earnings will improve by 20% in 2018 thanks to the tax plan something I didn't have in my estimates. Truth be told in the 2nd half when the market realize the true core is earning like at $3.20-3.40 run rate, they will give this a peer multiple which will allow $45 or so. Plus you get the throw in of that other business as well in addition which could be worth $3-4 extra at this point as well. I'm not expecting anything great for q4, this is about where this stock will be a year from now and I believe this bank like the others haven't run thanks to the short-term obstacles, but I believe this deal will bring long term rewards, but the stock has underperformed during this time, if your patient, this might be a good idea in the sector in my opinion. All is just my opinion, and I could always be wrong though.
AI
