Saturday, August 4, 2007

First Mutual Bancshares

First Mutual Bancshares is a NASDAQ listed security that has been trading in a range between $20.97 and $27.08 over the past year. With 6,694,510 shares outstanding, a recent price of $25.97 gives a total market capitalization of $177,270,622. While there are certainly larger companies, First Mutual Bancshares has definitely earned its place in the pack. Last year, First Mutual Bancshares created $1.45 in earnings for every share outstanding.

First Mutual Bancshares is currently priced by the market at 17.90 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 Mutual Bancshares could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.