TURNAROUND STORY at BANK MUTUAL CORP (BKMU)
Bank Mutual Corporation has picked themselves up off the floor and are moving forward. A quick overview: they are a Savings and Loan based out of Milwaukee, Wisconsin. They operate 79 banking offices in Wisconsin and 1 in Minnesota.
Before I provide this analysis, I want to preface it by saying that I think the pullback in the market has started and that we could drop down to 14,000 on the Dow before we continue higher. I've noticed that even when we have an up day in the market there are more decliners than there are advancers lately. That's a good indicator that there maybe a pullback in the market.
With that said, this stock is a great turnaround story that is well worth listening to.
To keep it simple, here are the reasons I like this company. (in no particular order)
1. First, from a technical standpoint, the stock has pulled back more than 10% after a torrid 42% move since Mid December of last year. (the whole industry has pulled back in the last couple of weeks).
2. BKMU earnings growth has increased substantially in the past year in comparison to the previous 3.
3. In their most recent earnings report, they beat estimates by 25%
4. Earnings have increased 62% year over year. (it's all about the earnings)
5. They have paid a dividend every quarter since the year 2000.
6. Profit margins at this savings loan have increased substantially in the past 4 quarters.
7. For what it's worth, they are ranked a strong buy at Zack's.
And finally from a macro perspective, there is a trend away from the mega supermarket bank to a smaller, more intimate type of institution, where consumers feel like they are treated more like people than a number. It's also true that a large majority of customers felt like they got screwed by "the banks" in the financial crisis which is a contributing factor to the trend from large to small. And don't think the large banks aren't aware of this, have you noticed how much nicer Bank of America is nowadays?