TFSL Pop! Anyone know why?

Investment Analysis Clubs Jim Royal
1

I assume it was related to the mutual stockholders waiving their rights to the dividend.

2

Perhaps, but that waiver vote has been taking place since at least 2016, and I don’t recall it having any effect on share price. Others more knowledgeable will chime in.

3

I agree - it’s not logical, but the timing is such that it seems related.

4

Look at the $KRE or regional banks for some ideas on why

1 Like
5

Yes, it’s broader-based in the regional banks. Yield curve is becoming steeper (lower short-term yields and less low longer-term yields), and that tends to be favorable for banks.

Jim

1 Like
6

Now around 15 - have we reached the top of the hill on this coaster ride?

7

A couple things:

  1. We’re running up to ex-dividend day, so we’re likely to see some upward pressure as people hold on.
  2. More generally, the yield curve is steepening (and has been), which is good for the bank’s loan book – ARMs written in the go-go 2020-2021 era are repricing higher, while funding costs (primarily CDs are lower)
  3. Today Gator Capital highlighted TFSL as a position and detailed why it’s an attractive purchase now. You can probably see the letter with a quick search.

Jim

2 Likes
8

Since mid 2022, the trading range has been 10-15, and more recently 12-15. I was hoping to buy some in the low 12s a few months ago, but that never happened. Not interested in giving up the dividend, even temporarily.

9

I picked up a big slug when it dropped a couple weeks ago just after earnings. It didn’t stay down long at all.

Jim

1 Like