Wednesday, August 8, 2007

K-Fed Bancorp

K-Fed Bancorp is a NASDAQ listed security that has been trading in a range between $12.61 and $20.08 over the past year. With 13,969,660 shares outstanding, a recent price of $12.87 gives a total market capitalization of $180,488,008. While there are certainly larger companies, K-Fed Bancorp has definitely earned its place in the pack. Last year, K-Fed Bancorp created $0.35 in earnings for every share outstanding.

K-Fed Bancorp is currently priced by the market at 37.10 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 below $1 a share, K-Fed Bancorp could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.