Preferred Bank (PFBC)
Financial Services · NMS · US
Fundamentals
Valuation and ratings
Preferred Bank trades at USD107.39, which is 124% below the USD240.72 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 42 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 10.2 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Preferred Bank
Preferred Bank provides various banking products and services to small and mid-sized businesses, entrepreneurs, real estate developers, professionals, and high net worth individuals. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; commercial loans, including lines of credit for working capital, term loans for capital expenditures, and commercial and stand-by letters of credit; and small business administration loans for business purposes, such as owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing. In addition, the company offers trade finance services, including commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/trust receipt financing, export financing, and bills purchase programs. Further, it provides cash management services; and internet, mobile, and tablet banking services. The company was incorporated in 1991 and is headquartered in Los Angeles, California.
PFBC passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Super investor ownership
9 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Two Sigma, TWO SIGMA INVESTMENTS, LP$16.75M · 0.0% of book
- Ken Griffin, CITADEL ADVISORS LLC$7.87M · 0.0% of book
- Israel Englander, MILLENNIUM MANAGEMENT LLC$5.98M · 0.0% of book
- Paul Tudor Jones, TUDOR INVESTMENT CORP ET AL$5.06M · 0.0% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$3.20M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Preferred Bank (PFBC) undervalued?
Against our discounted cash flow estimate of USD240.72, PFBC at USD107.39 is 124% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own PFBC?
9 of the institutions we track reported a position in PFBC in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is PFBC's P/E ratio?
PFBC trades at 10.2 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for PFBC, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.