Wednesday, August 8, 2007

Lincoln Bancorp

Lincoln Bancorp is a NASDAQ listed security that has been trading in a range between $17.11 and $20.43 over the past year. With 5,360,480 shares outstanding, a recent price of $17.26 gives a total market capitalization of $90,592,110. While there are certainly larger companies, Lincoln Bancorp has definitely earned its place in the pack. Last year, Lincoln Bancorp created $0.33 in earnings for every share outstanding.

Lincoln Bancorp is currently priced by the market at 52.40 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 below $1 a share, Lincoln Bancorp could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.