Saturday, August 4, 2007

First Federal Bancshares of Arkansas Inc

First Federal Bancshares of Arkansas Inc is a NASDAQ listed security that has been trading in a range between $21.60 and $25.43 over the past year. With 4,872,640 shares outstanding, a recent price of $22.03 gives a total market capitalization of $107,685,346. While there are certainly larger companies, First Federal Bancshares of Arkansas Inc has definitely earned its place in the pack. Last year, First Federal Bancshares of Arkansas Inc created $1.09 in earnings for every share outstanding.

First Federal Bancshares of Arkansas Inc is currently priced by the market at 20.20 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, First Federal Bancshares of Arkansas Inc could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.

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