{"id":51,"date":"2005-05-09T10:00:00","date_gmt":"2005-05-09T17:00:00","guid":{"rendered":"https:\/\/stockherd.com\/moosepond\/?p=51"},"modified":"2007-06-12T21:05:53","modified_gmt":"2007-06-13T01:05:53","slug":"commerce-bancorp","status":"publish","type":"post","link":"https:\/\/stockherd.com\/moosepond\/2005\/05\/09\/commerce-bancorp\/","title":{"rendered":"Sold Commerce Bancorp (CBH)"},"content":{"rendered":"

We sold CBH on June 12, 2007. Primary reason was declining on return on assets.<\/p>\n


\nSSG and PERT A (05-09-2005)<\/a> | Google Stocks<\/a> | Company Website<\/a><\/p>\n

\"Commerce
\nEntry from May 5, 2005:<\/strong>Growth.<\/strong> Value Line (25 Feb 2005) projects CBH growth in book value and loans at 18% and EPS growth at 17%. Value Line projects annual share net gains of between 10% and 15% through 2007-2009. Value Line also projects that asset, loan, and deposit growth could reach 20% annually as Commerce continues with its aggressive expansion strategy.<\/p>\n

Part 1 of the stock selection guide shows that CBH has grown steadily over the long term.<\/p>\n\n\n
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Quality.<\/strong> Return on shareholder equity has been consistently better than 18%. Return on assets, an important measure of performance for a bank, has remained slightly above 1.0% but is below the industry average of 1.6%. Value Line gives CBH a financial strength rating of B++ and earnings predicatability of 100. The RQR quality rating for CBH is 74.<\/p>\n

Valuation.<\/strong> From the SSG, 5-year projected EPS is 3.44. With a high PE of 20.6, projected high price is $70.90. With a low PE of 14.1, projected low price is 24.1. Using 25% \/ 50% \/ 25% zoning, CBH (currently $28.09) is a buy below 35.80<\/em><\/strong>.<\/p>\n

What Others Are Saying.<\/strong> While the analysts’ mean projected EPS growth is 16.6%, the analysts are split in their recommendations of CBH. They breakdown as follows: Buy(8), Outperform(0), Hold(4), Underperform(4) and Sell(2). “Underperform” and probably “Hold” are analyst speak for sell. The Motley Fool<\/a> made cautious but positive comments about CBH’s growth in a recent article. Standard & Poors<\/a> gives CBH a 5 Star rating (strong buy).<\/p>\n

Morningstar considers CBH fairly valued at $28.00 and only gives CBH 3 stars and a narrow moat. Here are Morningstar’s pros and cons:<\/p>\n

Bulls Say<\/strong><\/p>\n