BOFI has just suffered a short attack, to which Fletch wrote a great response.
I added about 7% to my position yesterday at $90.70. I figure it was at $105.55 on Friday, it’s a great long-term investment, and nothing has changed except the short article. And the truth is that I trust Fletch much more than I trust the short-writer.
For what it’s worth, BOFI has grown to my third largest position at 8.3% (avg cost $32).
I am not selling any shares given (a) this disruptive industry trend (to Internet-only banking) is still in the early stages of growth, (b) the Company is exceptionally well-run, and (c) I feel it is still fairly valued given their growth and market opportunities.
I also recently invested in INBK for the same reasons. While INBK has a ways to go to replicate BOFI’s operational position and size, they have a nationwide Banking platform to drive growth, considerable insider buying, skilled personnel additions, an attractive valuation, and are in the midst of transitioning their lending mix and focus the way BOFI has. If they execute well, I’d expect their shares & $100m market cap to quickly rise. This has the potential to be like investing in BOFI 3-5 years ago. We’ll see.
Anyway, I view my large BOFI investment, and smaller INBK investments, as a basket of bets on Internet banking.
Best of luck to all.
I have been watching the advice given by Saul and Fletch closely for the past few years. It has been my observation that when they are in agreement, which is quite frequently, it is prudent and profitable to listen closely.
They are among the brightest of the bright.
Both are in agreement that BOFI has been unfairly victimized by another short attack. Both see BOFI as a great long term investment. This MF recommendation has grown to my largest position over the past 2 or 3 years.
Anyone reading this who is relatively new to the process would be wise to start or add to BOFI at current prices.
I am deeply appreciative to you both, Fletch and Saul, for your time and work in posting for all of us to benefit.
“I added about 7% to my position yesterday at $90.70. I figure it was at $105.55 on Friday, it’s a great long-term investment, and nothing has changed except the short article. And the truth is that I trust Fletch much more than I trust the short-writer.”
I’ve been watching BOFI for a while and was nervous at the high price but this is an excellent entry for me.
Here’s another point to watch on Monday’s open.
Gleaned from the comments below the short article on Seeking Alpha.
“there’s ongoing stress test by FEDs, some are afraid small banks will not pass it. results will be released today after market close, if BOFI passes it successfully (which is very likely IMO) it will retrace back to 100-105 area in a matter of days.”
Maybe Fletch could share it with the rest of us who aren’t members of Stock Advisor?
Thanks Saul, as someone who’s had BofI grow to a fairly sizable portion of my portfolio I also appreciated Fletch’s write-up.
Since we’re talking about BofI, I just posted the following over on RB. In short, somebody had reached wits end over BofI’s requirement that customers frequently change their passwords. My experience is an intangible data point to add to investors’ thesis…
Hi Ron, like others, I completely sympathize with your frustration. In fact, I have not one but two BofI accounts, one for each of my small business ventures. Like you, I find it hard to keep straight the passwords and changes.
So why have I not taken similar action and moved to another institution for my banking needs? Well, it comes down to customer service. Every time I forget my password, I dial up BofI, reach a friendly customer service rep who then expeditiously connects me with one of their IT people. Like the customer service reps, their IT people are friendly, helpful and patient.
Let’s face it, they must get countless calls like this everyday, yet, here they are, accessible, happy to talk, ask you about the weather, and seem genuinely interested in having your businesses. And on the rare occasion I don’t reach anyone immediately, they call back within 15 minutes.
If not for their outstanding customer service, I’d be done with them. But then, they’d just be another bank. This is an important reason I’m an investor.