William Hood, director of First Guaranty Bancshares (FGBI, Financial), purchased 90,126 shares in the company on Nov. 3, according to a Form 4 filing with the Securities and Exchange Commission.
Hood paid $18 per share and now owns 302,993 shares in the company.
First Guaranty Bancshares is a Louisiana-chartered bank holding company that was founded 82 years ago in Amite, Louisiana, on March 12, 1934. The company’s origins go back over 80 years, but First Guaranty Bancshares began its modern history after a group of investors led by Marshall T. Reynolds (the company’s current chairman) invested $3.6 million in First Guaranty Bank as part of a recapitalization plan with the objective of building a community-focused commercial bank in Louisiana.
Since Reynolds' investment and his implementation of his recapitalization plan, First Guaranty Bancshares has expanded from six branches and $159 million in assets at the end of 1993 to 21 branches and $1.5 billion in assets as of Dec. 31, 2015.
First Guaranty Bancshares has a market cap of $129.76 million, a price-earnings (P/E) ratio of 9.07, an enterprise value of $159.35 million and a price-book (P/B) ratio of 1.01.
According to GuruFocus, First Guaranty Bancshares has a 5 of 10 financial strength rating with a cash-debt ratio of 0.49, an equity-asset ratio of 0.09, an interest coverage ratio of 2.19, a Piotroski F-Score of 5 and a Beneish M-Score of -13.71 indicating that the company is not a manipulator of its financial statements.
The company also has a 7 of 10 profitability and growth rating with an operating margin of 36.86%, a net margin of 24.81%, an ROE of 10.99%, an ROA of 0.98% and EPS (3y) growth of 20.80%.
Hood likely purchased the shares because the company has good financial statements, it continues to expand its operations, and it is run by a vigilant chairman.
First Guaranty Bancshares has also successfully paid a dividend yield for 90 straight quarters according to its most recent 10-K filing. The company is trading below its intrinsic value according to the Peter Lynch chart below.
Disclosure:Â Author does not own any shares in this company.
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