Wednesday, August 8, 2007

Lake Shore Bancorp Inc.

Lake Shore Bancorp Inc. is a NASDAQ listed security that has been trading in a range between $9.50 and $14.50 over the past year. With 6,612,500 shares outstanding, a recent price of $10.00 gives a total market capitalization of $66,720,126. While there are certainly larger companies, Lake Shore Bancorp Inc. has definitely earned its place in the pack. Last year, Lake Shore Bancorp Inc. created $0.28 in earnings for every share outstanding.

Lake Shore Bancorp Inc. is currently priced by the market at 35.10 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, Lake Shore Bancorp Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.