Tuesday, August 7, 2007

Naugatuck Valley Financial Corporation

Naugatuck Valley Financial Corporation is a NASDAQ listed security that has been trading in a range between $10.05 and $12.95 over the past year. With 7,406,110 shares outstanding, a recent price of $10.97 gives a total market capitalization of $81,170,966. While there are certainly larger companies, Naugatuck Valley Financial Corporation has definitely earned its place in the pack. Last year, Naugatuck Valley Financial Corporation created $0.16 in earnings for every share outstanding.

Naugatuck Valley Financial Corporation is currently priced by the market at 70.60 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 below $1 a share, Naugatuck Valley Financial Corporation could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.

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