Saturday, August 4, 2007

First Regional Bancorp

First Regional Bancorp is a NASDAQ listed security that has been trading in a range between $19.75 and $34.87 over the past year. With 12,250,730 shares outstanding, a recent price of $21.52 gives a total market capitalization of $275,886,445. While there are certainly larger companies, First Regional Bancorp has definitely earned its place in the pack. Last year, First Regional Bancorp created $2.90 in earnings for every share outstanding.

First Regional Bancorp is currently priced by the market at 7.40 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 Regional Bancorp is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.