Wednesday, August 1, 2007

1st Constitution Bancorp

1st Constitution Bancorp is a NASDAQ listed security that has been trading in a range between $17.02 and $20.50 over the past year. With 3,731,510 shares outstanding, a recent price of $16.60 gives a total market capitalization of $59,816,108. While there are certainly larger companies, 1st Constitution Bancorp has definitely earned its place in the pack. Last year, 1st Constitution Bancorp created $1.45 in earnings for every share outstanding.

1st Constitution Bancorp is currently priced by the market at 11.50 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share in excess of $1 a share, 1st Constitution Bancorp could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.