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Although idea generation here has been limited, we expect acceleration in this area in the future, and as mentioned previously, over the last few years we have identified a few attractive ideas, such as CIT Corporation (CIT) and Chemtura. We believe both companies have strong long-term outlooks. After CIT emerged from bankruptcy, it transitioned from a specialty finance company funded in the capital markets to a bank funded with deposits. While we anticipate that the asset side of the company will always be a bit different than most banks, we believe the liability side of the balance sheet should be more stable and fund the company at a lower cost. Assuming this transition is successful, we believe CIT should garner a much higher valuation and potentially higher than the 1.3-1.6x book value it traded at in the past. The stock has been a successful holding in our Mid Cap Value Fund, and we continue to believe the company has substantial upside from current levels.
John Keeley Comments on CIT Corporation (CIT)
From Keeley Funds' first-quarter commentary:
Although idea generation here has been limited, we expect acceleration in this area in the future, and as mentioned previously, over the last few years we have identified a few attractive ideas, such as CIT Corporation (CIT) and Chemtura. We believe both companies have strong long-term outlooks. After CIT emerged from bankruptcy, it transitioned from a specialty finance company funded in the capital markets to a bank funded with deposits. While we anticipate that the asset side of the company will always be a bit different than most banks, we believe the liability side of the balance sheet should be more stable and fund the company at a lower cost. Assuming this transition is successful, we believe CIT should garner a much higher valuation and potentially higher than the 1.3-1.6x book value it traded at in the past. The stock has been a successful holding in our Mid Cap Value Fund, and we continue to believe the company has substantial upside from current levels.
Although idea generation here has been limited, we expect acceleration in this area in the future, and as mentioned previously, over the last few years we have identified a few attractive ideas, such as CIT Corporation (CIT) and Chemtura. We believe both companies have strong long-term outlooks. After CIT emerged from bankruptcy, it transitioned from a specialty finance company funded in the capital markets to a bank funded with deposits. While we anticipate that the asset side of the company will always be a bit different than most banks, we believe the liability side of the balance sheet should be more stable and fund the company at a lower cost. Assuming this transition is successful, we believe CIT should garner a much higher valuation and potentially higher than the 1.3-1.6x book value it traded at in the past. The stock has been a successful holding in our Mid Cap Value Fund, and we continue to believe the company has substantial upside from current levels.
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