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Stocks A / Axos Financial (was BOFI)


Subject:  A Bargain at this Price Date:  5/20/2017  11:51 PM
Author:  murph2727 Number:  157 of 171

The market has been harsh on BOFI lately. In one sense, I get it. There have been accusations and investigations. In addition, the approval ratings of of management by employees has not been high.

At the same time, the real facts minimize these concerns. First of all, all of the allegations are well in the past and have been investigated thoroughly. Secondly, while management approval ratings are below average, they are much better than some companies, including Warren Buffet held Kraft/Heinz.

Now the most important point. BOFI's valuation is very compelling. BOFI has a PE of 11. If there is no growth at all, the PE is well below that of industry peers. In other words, if there is no growth at all, you shouldn't lose money. The reality should be much better than that. I would expect 10-11% earnings growth the next few years which means even if BOFI stays at an industry low PE of 11,the stock should rise by 11% annually.
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