Investment analysis of the common stocks of selected California banks. - Page 79 |
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m a t e l y 143 p e r c e n t o f book v a l u e and t h e s t o c k o f
C i t i z e n s N a t i o n a l h ad a y e a r l y h ig h b i d p r i c e w h ic h was
130 p e r c e n t o f book v a l u e • By t h e en d o f 1947 t h e
s t o c k s o f b o t h o f t h e s e b a n k s w ere s e l l i n g a t p r i c e s
b e lo w book v a l u e , an d t h e y e a r l y h i g h b i d p r i c e o f t h e s e
s t o c k s re m a in e d b e lo w book v a l u e u n t i l 1952 f o r S e c u r i t y -
F i r s t N a t i o n a l and u n t i l 1954 f o r C i t i z e n s N a t i o n a l .
D u rin g t h e e n t i r e p e r i o d t h a t t h e y e a r l y h i g h b i d
p r i c e o f t h e s e two s t o c k s was b elo w book v a l u e , t h e
e a r n i n g s p e r s h a r e f o r b o t h s t o c k s i n c r e a s e d e a c h y e a r .
Even i n 1945 an d 1 9 4 6 , when t h e s e s t o c k s s t a r t e d t h e i r
d ro p from s e l l i n g i n t h e m a r k e t a t p r i c e s w h ich e x c e e d e d
book v a l u e t o p r i c e s b elo w book v a l u e , t h e y e a r l y e a r n i
n g s o f t h e b an k s i n c r e a s e d *
The d i s c u s s i o n o f i n v e s t m e n t v a l u e e m p h a siz e d
t h a t t h e m o st i m p o r t a n t s i n g l e f a c t o r w h ich c o n t r i b u t e s j
t o t h e v a l u e o f a f i r m ’ s s t o c k i s t h e a b i l i t y o f t h e \i[
f i r m t o e a r n p r o f i t s . I n t h e c a s e o f t h e two b a n k s c i t e d
a b o v e , t h e r e a p p e a r s t o h av e b e e n a s i t u a t i o n w here t h e
v a l u e o f t h e s t o c k seemed t o i n c r e a s e i n v a l u e , w h ile t h e i
p r i c e f e l l b e lo w boo k v a l u e . One o f two r e a s o n s may be
r e s p o n s i b l e f o r su c h a c t i v i t y : (1 ) e i t h e r t h e p r i c e was j
t o o h ig h i n 1 9 4 5 , o r (2) bank s t o c k s i n g e n e r a l d e v e lo p e d j
a r e p u t a t i o n a s b e i n g p o o r i n v e s t m e n t s . To a c e r t a i n I
Object Description
Description
| Title | Investment analysis of the common stocks of selected California banks. - Page 79 |
| Repository email | cisadmin@lib.usc.edu |
| Full text | m a t e l y 143 p e r c e n t o f book v a l u e and t h e s t o c k o f C i t i z e n s N a t i o n a l h ad a y e a r l y h ig h b i d p r i c e w h ic h was 130 p e r c e n t o f book v a l u e • By t h e en d o f 1947 t h e s t o c k s o f b o t h o f t h e s e b a n k s w ere s e l l i n g a t p r i c e s b e lo w book v a l u e , an d t h e y e a r l y h i g h b i d p r i c e o f t h e s e s t o c k s re m a in e d b e lo w book v a l u e u n t i l 1952 f o r S e c u r i t y - F i r s t N a t i o n a l and u n t i l 1954 f o r C i t i z e n s N a t i o n a l . D u rin g t h e e n t i r e p e r i o d t h a t t h e y e a r l y h i g h b i d p r i c e o f t h e s e two s t o c k s was b elo w book v a l u e , t h e e a r n i n g s p e r s h a r e f o r b o t h s t o c k s i n c r e a s e d e a c h y e a r . Even i n 1945 an d 1 9 4 6 , when t h e s e s t o c k s s t a r t e d t h e i r d ro p from s e l l i n g i n t h e m a r k e t a t p r i c e s w h ich e x c e e d e d book v a l u e t o p r i c e s b elo w book v a l u e , t h e y e a r l y e a r n i n g s o f t h e b an k s i n c r e a s e d * The d i s c u s s i o n o f i n v e s t m e n t v a l u e e m p h a siz e d t h a t t h e m o st i m p o r t a n t s i n g l e f a c t o r w h ich c o n t r i b u t e s j t o t h e v a l u e o f a f i r m ’ s s t o c k i s t h e a b i l i t y o f t h e \i[ f i r m t o e a r n p r o f i t s . I n t h e c a s e o f t h e two b a n k s c i t e d a b o v e , t h e r e a p p e a r s t o h av e b e e n a s i t u a t i o n w here t h e v a l u e o f t h e s t o c k seemed t o i n c r e a s e i n v a l u e , w h ile t h e i p r i c e f e l l b e lo w boo k v a l u e . One o f two r e a s o n s may be r e s p o n s i b l e f o r su c h a c t i v i t y : (1 ) e i t h e r t h e p r i c e was j t o o h ig h i n 1 9 4 5 , o r (2) bank s t o c k s i n g e n e r a l d e v e lo p e d j a r e p u t a t i o n a s b e i n g p o o r i n v e s t m e n t s . To a c e r t a i n I |
