Prosperity Bancshares, Inc. (PRSP)

cashsage (96.87) Submitted: 5/15/2009 12:13:53 PM : Start Price: $27.44 PRSP Score: -17.30

PRSP has has a too high valuation compared to its sales potential.

ALPHADividend (88.30) Submitted: 4/16/2009 1:55:07 AM : Start Price: $28.02 PRSP Score: -10.33

This company was individually screened to verify that during the boom years ('04-'08), their Balance Sheet expansion appeared excessive. The company operates within the FIRE (Financial Insurance Real Estate) sector of the economy which has been hot the past few decades, yet will run out of steam this coming decade. At some point or another, something's gotta give with this company. Income will start collapsing due to debt levels, and/or dividends will be slashed or removed, and/or significant losses will be realized. The chances of this being a growth company or having significant growth is heavily muted due to its dividend paying obligations at the current levels of today.
This company was personally found after using a screener.

initial google screen:
Market cap over 400M
Dividend yield over 1%
1 Year price change better than -35%
price to book 0.9 or higher
total debt/equity (recent qtr) greater than 50%
13 week price change greater than 17%

After individually screening for companies appearing overvalued due to Balance sheet expansion, it yielded the following stocks to short:
EVR NTRS PRSP JEF LAZ FIS RJF

For the heavy shorting within the FIRE sector as part of the above picks, I will offset them with the following longs relating to FIRE companies:
LONG on BX CVBF UTR

This will be the primary focus of this profile, to seek & obtain alpha from long/short dividend opportunities across various industries.
- ALPHADividend

intrepid339 (< 20) Submitted: 10/13/2008 5:48:33 PM : Start Price: $33.73 PRSP Score: +8.25

Pristine Credit quality over 20 years earnings greater each year Likely aquiror in stressful market conditions

mindmuse (99.89) Submitted: 8/20/2008 12:34:57 PM : Start Price: $29.93 PRSP Score: -41.26

Joining dexion's stoning party

goldminingXpert (99.98) Submitted: 8/19/2008 6:04:50 AM : Start Price: $30.26 PRSP Score: -40.11

Dexion10 nailed this one: http://caps.fool.com/Blogs/ViewPost.aspx?bpid=79889&t=01006200319074134916

jester112358 (30.25) Submitted: 8/19/2008 4:36:46 AM : Start Price: $30.26 PRSP Score: -40.11

I like dexion10's analysis of their book value and questionable loan portfolio. My consider some puts on this one in my real trading portfolio. Thanks for the great analysis of banks dexion10!

Tastylunch (99.64) Submitted: 8/19/2008 12:47:08 AM : Start Price: $30.26 PRSP Score: -40.11

Dexion wrote a good pitch, http://caps.fool.com/Pitch/PRSP/2929760/im-very-excited-to-add-this-te.aspx

I took a look and I also didn't like what I saw.

should be good for at least a +10 in the ole CAPS.

dexion10 (29.63) Submitted: 8/12/2008 12:25:30 PM : Start Price: $32.76 PRSP Score: -32.08

I'm very excited to add this texas bank PRSP to my list of regional bank shorts. I found this because the insiders just sold 3.3M in stock.

Before I tear this bank to shreads let me give you a key fact. This is a $1.5B market cap bank. Remember that as we review the size enormous size of their:

Goodwill - $800M
Multiple to tangible book = 4.5x
Construction Loans $600M (360M in land)

vs.

Market cap of 1.5B

This bank trades at 4.3x tangible book value at a time when most banks are lucky to trade at 2x to 2.5x

PRSP has $830M in goodwill (likely related to overpaying for previous acquisitions)

Further the bank has over 600M in construction loans. They have nearly $360M loaned out on land deals of one form or another. Remember this is only a $1.5B bank

At June 30, 2008, construction loans totaled $658.669 million, consisting of approximately $225 million of single family residence construction; $130 million of land development; $135 million of raw land; $100 million of lot loans; and $69 million of commercial construction and other construction loans.

trendsJohn (< 20) Submitted: 6/14/2008 3:23:02 PM : Start Price: $26.97 PRSP Score: +61.19

multiple bullish technical signals 91.3 (contrary)