Tuesday, August 7, 2007

Monroe Bancorp

Monroe Bancorp is a NASDAQ listed security that has been trading in a range between $15.23 and $17.97 over the past year. With 6,353,340 shares outstanding, a recent price of $16.95 gives a total market capitalization of $110,484,579. While there are certainly larger companies, Monroe Bancorp has definitely earned its place in the pack. Last year, Monroe Bancorp created $1.24 in earnings for every share outstanding.

Monroe Bancorp is currently priced by the market at 13.60 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, Monroe Bancorp could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.