Middleburg Financial Corp. (NASDAQ:MBRG)

CAPS Rating: 5 out of 5

A bank holding company, through its subsidiaries, offers a range of banking, fiduciary and investment management services to both individuals and small businesses.

Recs

1
Player Avatar JakilaTheHun (99.94) Submitted: 3/30/2010 8:07:43 AM : Outperform Start Price: $14.75 MBRG Score: -43.79

This isn't a high conviction pick for me. In fact, I'm not even totally sure I should be green thumbing this one. It is probably undervalued (like most commercial banks), but not significantly so. If earnings figures hold up, looks like it should be worth around $20 - $25.

There are, however, a few things that make this an intriguing pick:

(1) It is well capitalized
(2) Net interest margins are very strong
(3) It is headquartered in Northern Virginia; more in what-I-call the "retirement zone" area outside of the outer DC 'burbs
(4) It is still profitable even during one of the worst periods for small commercial banks, and
(5) David Sokol, who is potentially the next CEO of Berkshire Hathaway once Buffett steps down, seems to be buying into this thing like crazy

I have no idea what Sokol sees in Middleburg and Ravi Nagarajan's article on the issue is the only reason I ever noticed it:

http://seekingalpha.com/article/195892-why-is-david-sokol-so-interested-in-middleburg-financial

But I'll go ahead and go along for the ride. There's probably enough of a margin for error so that even if this isn't the growth bank of the century, I can still come out with a positive CAPS score.

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