…The Company reported net income of $17.0 million for the quarter ended September 30, 2021 compared to net income of $13.6 million for the quarter ended September 30, 2020. The improvement when compared to the prior year quarter included an increase in net interest income and lower non-interest expense, partially offset by lower net gain on the sale of loans…
… Under current Federal Reserve regulations, the MHC is required to obtain the approval of its members every 12 months for the MHC to waive its right to receive dividends. As a result of a July 13, 2021 member vote and the subsequent non-objection of the Federal Reserve, the MHC has the approval to waive the receipt of up to $1.13 per share of possible dividends to be declared on the Company’s common stock during the twelve months subsequent to the members’ approval (i.e., through July 13, 2022), including a total of up to $0.8475 during the three quarters ending December 31, 2021, March 31, 2022 and June 30, 2022, to be declared at the discretion of the Company’s board of directors. The MHC has conducted the member vote to approve the dividend waiver each of the past eight years under Federal Reserve regulations and for each of those eight years, approximately 97% of the votes cast were in favor of the waiver…
TFSL has been a good stock to play the swings, especially if you can maintain patience and wait for a good buy price. I have been trying to hold on until $16, at which point the current dividend would equal a 7% yield. The stock has been in a downtrend over the past year so we may see it continue to slide in the near term. But I think $16 would be a favorable price to buy, if it gets there.
If I can find great opportunities where the stock is down a serious 20-25% (just bought LBRDA today, for example) but with uncapped long-term upside, then why should I buy TFSL at anything but a very attractive price when it won’t go higher than $22?
It would be foolish to not demand the best price here when so many better things are at attractive prices.
Simple answer for me has to do with risk. TFSL may have capped upside but also seems to have a pretty solid floor under it. In retirement now, I’m happy to be getting the solid dividend TFSL pays without much risk of loss of capital.
The Liberty series always seems too complicated and less certain for me to get how I make $$$. Of course that’s why we pay you the big money so you can help us understand the great choices that are out there!
To be clear I really do appreciate the Special Opps you come up with, just easier for me to grasp how I make money with TFSL.
My nephew is still bugging me about how to come up with another Bagger Dave’s Burger Barn or what ever it was called, just with potential for bigger numbers!
Hahaha, David, that’s hilarious about Bagger Dave’s. We all enjoyed a 7x return (or whatever) on a microcap. Yes, we only invested $25, but the IRR was insane.
We’re agreed on TFSL, I think. TFSL is an attractive, relatively low-risk stock with potential for steady returns. If we buy at $16 and it goes to $22 in 2 years with $2.26 in dividends along the way, we can enjoy ~50% returns over a short time frame with minimal risk. Over 3 years is still attractive. Even over 4 years is still interesting, with that dividend.
It certainly fits the risk tolerance of risk-averse investors, and I like it for a certain slice of my portfolio.
As a sidenote, today CBMB got a buyout offer. CBMB was a stock that I featured as an example in Ch 2 of my book. The buyout came just 3 years and 4 months after it went public at a multiple (by my quick calculation) of 129% of tangible book value.
I really am nearly done with my write-up on FFBW. I have a couple other thrifts that are really quite interesting, too, and I’d like to write those up as well.
I am curious if you know why some of the John Malone companies are better than others to invest in. I have had stagnant cash sitting in Liberty Global and Lilak since their recommendation by Inside vale service whereas you are quite bullish on LBRDA etc.
It all depends on the underlying businesses. LBRDA’s major asset is its stake in CHTR, which is doing very well, executing a Malone-like playbook while enjoying the very attractive economics of cable. And you can buy a stake in CHTR at a discount via LBRDA.
Liberty Global has had its own challenges in Europe/England, with different economics and regulatory regime. Meanwhile, LILAK (which I also own) has its own concerns (including political issues in Latin America.)
I had heard a bit ago that LILAK was floating the idea of listing one of their assets to help get the price of their stock up. I don’t follow it super closely in the recent past, however, so I don’t know where that development is now.
LBRDA is probably what I like most of the Malone complex, but the market seems to not like DISCA as it merges with various Warner assets, so that may be interesting, too.
Simple answer for me has to do with risk. TFSL may have capped upside but also seems to have a pretty solid floor under it. In retirement now, I’m happy to be getting the solid dividend TFSL pays without much risk of loss of capital.
Fed in its balance sheet expansion not only owns Treasuries but MBS too. Fed actually owns 2.5 Trillion MBS. To begin with they will stop buying MBS, and then as part of QT or balance sheet reduction they will run down their MBS book.
I am sure FED will try not to disrupt housing market, but if the inflation sustains and they end up accelerating QT, then it is going to cause disruptions to MBS market.
Have you looked into the role of mortgages on TFSL? Most thrifts are very dependent on mortgages and have limited other type of loans. I could be wrong, at least that’s what I saw sometime back.