As all of the MHC's have sold off recently, I think KFED ($15.65 closing price today) has been oversold. Currently, KFED, located in California (mostly southern), has $800 million in assets and 10.9% tangible equity/assets. If one assumes an eventual second step, the following are the valuations based on various offering price/book multiples in the second step offering:
100% of TBV = exchange ratio of 1.4, currently trading at 107% of fully converted book, would have 22% tangible equity/assets after offering.
110% of TBV = exchange ratio of 1.85, currently trading at 92% of fully converted book, would have 25% tangible equity/assets after offering.
A bonus to owning KFED now, is that it most likely gets added to the Russell 2000 on the close on Friday, June 22, 2007 (based on my estimates of what market cap
s as of 5/31/07 are to be included in the Russell 2000). Therefore, there is going to be demand to buy about 300k shares+ of stock by the index funds.
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