Download Gator Research

Thank you for your interest in our research.

At Gator, we are dedicated to a research-oriented investment approach. To demonstrate our research integrated investment strategy, we would like to provide you some insight into our analytical stock selection process. As a reminder, the discussion of individual securities should not be construed as a recommendation to buy or sell such securities.

Not all research is for securities currently held. Any securities for which research is provided herein may be reduced, completely closed out, or not purchased at all without notice of any kind.

  • September 22, 2021: Planet MicroCap Podcast | MicroCap Investing Strategies

    Robert Kraft: This podcast is for informational purposes only and is not an offer or solicitation of an offer to buy or sell securities. SNN Network, SNN Inc, and the Planet MicroCap Podcast, and the representatives are not licensed brokers, broker/dealers, market makers, investment bankers, investment advisors, analysts, or underwriters. We do not recommend any companies discussed, we may buy and sell securities in any company mentioned, and may profit in the event those securities rise in value. We recommend …… Read More
  • July 27, 2021: Esquire Financial Holdings (NASDAQ: ESQ)

    One of the new small bank positions that we purchased for the Fund is in Esquire Financial Holdings (“Esquire” or “ESQ”). Esquire is a bank headquartered on Long Island, focused on serving the banking market for attorneys. By the nature of their business, attorneys often have control of money in escrow accounts for the benefit of their clients. These escrow deposits are attractive to banks because they tend to be sticky and not rate sensitive. Attorneys also have borrowing needs …… Read More
  • April 29, 2021: Royal Bank of Canada

    We believe Canadian banks are attractive relative to US banks right now. Canadian banks are as cheap as they’ve been compared to US banks in the last 20 years. The Canadian banking system is an oligopoly of five national banks. This oligopoly in Canada has allowed the banks “North of the Border” to post higher returns with less cyclicality than their US peers. US banks have had a huge run in the last six months due to investor optimism about …… Read More
  • April 1, 2021: JP Morgan Chase Missing Strategic Opportunity in the UK

    JP Morgan Chase (“JPM” or “Chase”) is missing a strategic opportunity by not making an acquisition in the UK. Instead, JPM is entering the consumer banking market in the United Kingdom by creating a start-up digital bank. I believe this is a waste of time and resources for the bank. This digital bank will take decades to impact JPM’s bottom line. Instead, JP Morgan Chase should take advantage of the low valuations among UK banks and acquire Barclays PLC. Acquiring …… Read More
  • January 27, 2021: Kingstone Companies

    We have owned Kingstone (“KINS”) for several years. We wrote an investment thesis in our 2017 Q1 letter. The company has grown its New York state homeowner’s insurance business at an attractive rate ever since Superstorm Sandy hit Long Island. The company had achieved an A- taking from A.M. Best and started to expand into additional states in the Mid-Atlantic and New England. It ran into some issues as the CEO tried to install a successor. Besides homeowner’s insurance, the …… Read More
  • January 27, 2021: Arlington Investment Corp

    Arlington Investment (“AAIC”) is a mortgage real estate investment trust. AAIC’s liquidation value (or book value) is $5.90, and the stock is trading for $3.66.  We don’t think it will return to $5.90 in the near term, but we believe the stock can get to $5.60 (or 90% of the estimated Q4 book value) in 6 to 12 months, which is +53% higher than the current price. The management at AAIC has made strategic changes to increase their liquidation value.  …… Read More
  • January 27, 2021: BBX Capital Inc

    BBX Capital (“BBX”) is a company controlled by the Levan family in Ft. Lauderdale. The company has been through several iterations. At various times, it has owned a bank, a home builder, and a timeshare business. The current iteration was formed this past Fall after spinning-off its timeshare business, Bluegreen Vacation Holdings (“BVH”). The remaining businesses in BBX Capital are several real estate ventures located throughout Florida, a building products company focused on windows and doors, and a struggling candy …… Read More
  • November 17, 2020: Q4 2020 Market Outlook: Regional Bank Opportunity

    Jonathan Bale: Good morning everyone, and welcome to the Gator Capital Management Q4 2020 webinar. And thank you for joining us. Our Q4 2020 webinar will be presented by portfolio manager, Derek Pilecki. The webinar will last approximately 30 minutes, after which, we will open the floor for a question and answer session. If you have any questions you can submit any time during this session by clicking the Q&A icon on your screen. Due to time restraints, if your …… Read More
  • October 26, 2020: Flushing Financial Corp

    Flushing Financial (“FFIC”) is a bank with 20 branches on Long Island.  Originally, FFIC was mutual thrift that converted to stock ownership in 1995. The bank has had a long history of strong credit quality, but investors have sold the stock due to COVID-19.  We think the valuation is way too low given the bank’s long history of strong credit and incremental changes management is making to the business to improve returns. Strong credit – FFIC has a history of …… Read More
  • October 26, 2020: ConnectOne Bancorp

    ConnectOne (“CNOB”) is a $7 billion bank with 28 branches mostly in northern New Jersey.  ConnectOne has a strong management team led by CEO Frank Sorrentino.  The bank has a history of strong organic growth.  In recent years, it has become a skilled consolidator of other banks.  With the pandemic, investors sold the stock due to general concerns regarding credit risk.  We think the valuation is too low given the bank’s history of solid credit and strong growth. Strong loan …… Read More
  • August 18, 2020: Q3 2020 Market Outlook: Puerto Rico Banks   Jonathan Bale: Good morning everyone. Welcome to the Gator Capital Management Q3 2020 Webinar. And thank you for joining us. Our Q3 2020 Webinar will be presented by Managing Member and Portfolio Manager, Derek Pilecki. The webinar will last approximately 30 minutes, after which we will open the floor for a question and answer session. Do you have any questions, you can submit at any time during this session by clicking the Q&A icon on your screen. Due …… Read More
  • July 27, 2020: Puerto Rico Banks

    We purchased shares in three publicly-traded Puerto Rico Banks, OFG Bancorp (“OFG”), Popular “BPOP”), and First Bancorp Puerto Rico (“FBP”), during Q2.  We believe they represent extraordinarily good values in the current market.  We previously owned OFG from 2016 to 2019, so we’ve been familiar with these banks for awhile. The total position size of the three Puerto Rican banks in the Fund is about 15%. Banking consolidation within Puerto Rico – Puerto Rico is on its way to 3 …… Read More
  • February 11, 2020: Q1 2020 Market Outlook: Bank Mergers of Equals   Alexis Sayers: Good morning everyone. Welcome to Gator Capital’s Q1 Market Outlook Webinar. Thank you for joining us for our first call of 2020. My name is Alexis Sayers, and I am a Marketing Analyst here at Gator Capital. I’m excited to welcome you today to our webinar. Our Q1 Market Outlook will be presented by Managing Member and Portfolio Manager, Derek Pilecki. The presentation will last approximately 30 minutes. We will open the floor for 10 minutes …… Read More
  • January 27, 2020: Merger of Equals: An Emerging Trend in Bank Mergers

    A new trend emerged in bank mergers in 2019: the merger of equals (or “MOE”).  While MOEs have been around for decades, few have been announced in the last 20 years.  In the late 1990s, there were several famous MOEs such as NationsBank/Bank of America, Norwest/Wells Fargo, Travelers/Citibank, and Chase Manhattan/J.P. Morgan that formed what are now the four largest banks. TCF Financial and Chemical Financial kicked off the 2019 revival of MOEs in January.  BB&T and SunTrust followed with …… Read More
  • November 12, 2019: Q4 Market Outlook: Growth Banks Webinar Hi everyone. This is Derek. We’re going to wait a few minutes to get started to let people dial in.   Okay welcome everyone. This is Derek Pilecki. Welcome to Gator Capital’s Q4 market outlook webinar. To get started, I’d like to read a disclaimer. The views and opinions in this presentation are solely those of Gator Capital Management. Gator Capital Management has made every attempt to ensure the accuracy and reliability of the information provided, but it cannot …… Read More
  • October 21, 2019: Opportunity in Growth Banks

    Regional bank stocks have had a challenging period over the last 16 months.  Since June 2018, the S&P Regional Banks Select Industry Index declined by 18% and trailed the S&P 500 Index by 27%. During this time, the median bank in this index increased earnings by 10%. Banks are expected to continue to grow earnings going forward.  Using Regions Financial (or “RF”) as an example of a generic regional bank, RF’s forward price-to-earnings (“P/E”) multiple has declined from 13.6x to …… Read More
  • July 25, 2019: SLM Corporation

    SLM Corporation (“SLM” or “Sallie Mae”) is the holding company for Sallie Mae, the largest lender in the private student loan market.  We have owned Sallie Mae for three years and wrote to you about it in our Q2 2016 letter when we reviewed our investment theses on several consumer finance stocks.  We believe Sallie Mae is an attractive stock at the current price.  We understand the reasons Sallie Mae’s stock is cheap and think other investors should not be …… Read More
  • June 21, 2019: Overlooked by the Market: Goldman Sachs’s New CEO as a Catalyst to Unlock Value

    DOWNLOAD ARTICLE David Solomon became Goldman’s CEO in October of 2018.  We have read several articles about his disc jockeying at night clubs.1  These articles make for fun reading especially since this unusual hobby seems so out-of-character for an executive at a company like Goldman.  However, none of these articles focus on the opportunity Solomon has to reshape the firm away from the capital-intensive institutional trading Fixed Income, Currency & Commodities (“FICC”) business unit and whether Solomon will act on …… Read More
  • April 15, 2019: SVB Financial Group

    We started a position in SVB Financial (ticker: SIVB) during the 1st quarter.  SIVB is the bank holding company for Silicon Valley Bank, which has a strong franchise providing commercial banking to venture capital firms and their venture-backed investment companies.  Over the past 20 years, SIVB’s stock has returned 17.3% annually compared to the S&P 500 returning 5.9% and the bank index returning 2.6%.  These returns are a testament to the bank’s strong franchise. Despite SIVB’s strong franchise and great …… Read More
  • January 24, 2019: GSE Preferred Stock

    We have held a position in the preferred stock of the Government Sponsored Enterprises (GSEs) almost since the Fund’s inception.  The GSEs are Fannie Mae and Freddie Mac, which buy mortgages from banks and package them into mortgage-backed securities (MBS).  Fannie and Freddie earn a fee for guaranteeing the credit of the mortgage underlying the MBS they issue. We last wrote about our position in the GSE preferreds in detail in February 2015.  There are several recent developments regarding this …… Read More
  • October 24, 2018: Credit Suisse – Investment Thesis

    Our investment thesis in Credit Suisse includes improved capital allocation to higher margin businesses, conservative guidance on future returns, open-ended growth opportunity in wealth management, improved capital levels and potential capital return, improved cost structure, the reduction of legacy costs and litigation leading to improved returns, a low valuation, and the potential benefit of higher interest rates. Tidjane Thiam was appointed CEO of Credit Suisse in 2015.  We admired Thiam in his prior role as CEO of Prudential PLC, the …… Read More
  • July 23, 2018: Ameriprise Financial (AMP)

    We’ve recently added to our position in Ameriprise Financial. We think the current 9.6x forward PE ratio is a very attractive valuation given Ameriprise’s growing financial advisor business. We purchased our initial position in Ameriprise in 2016. In 2016, Ameriprise was trading at a low forward PE multiple of 9.5x due to the risk of the proposed DOL Fiduciary Rule. Ameriprise rallied strongly right after the 2016 Presidential Election on the expectation that the new Republican Administration would reduce the …… Read More
  • April 16, 2018: Barclays PLC (BCS)

    We started a long position in Barclays PLC (“Barclays”) for the Fund in February. Barclays has been a frustrating stock for investors. Over the last five years, Barclays has returned -19% vs. the KBW Bank Index returning 109%. But, we think improved stock price performance could finally be on the horizon for Barclays and hope our purchase will prove timely. Barclays should produce improved returns over the next three years due to its cost-cutting and reallocation of capital within its …… Read More
  • November 20, 2017: ARES Management: (ARES)

    We own Ares Management. Ares Management is a Los Angeles-based alternative asset manager that alumni of Apollo Management founded in 1997. Ares specializes in direct private lending, but the firm also has significant private equity and real estate platforms. Ares Management is the third-party manager for the largest publicly-traded business development company (BDC), Ares Capital Corporation (ARCC). Here is our investment thesis on Ares Management: We Favor Alternative Managers over Traditional Asset Managers – We also own several other alternative …… Read More
  • September 19, 2017: SLM CORPORATION (SLM)

    We purchased SLM Corporation (“SLM”) this summer because it was trading at 10x 2017 estimated EPS and is growing its loan portfolio more than 20% annually. SLM is the renamed student loan company formerly known as Sallie Mae. The student loan industry has gone through significant changes over the last 10 years. The industry used to originate a mix of government guaranteed loans and private loans. In 2010, the government ended the program of third-party lenders making government guaranteed loans. …… Read More
  • August 23, 2017: OFG Bancorp (OFG)

    We’ve owned shares of OFG Bancorp for a little over a year and have added to our position recently. OFG is the third largest of the publicly-traded banks in Puerto Rico (PR). We added to the position because we believe the bank has improved operations, but the market is distracted by the restructuring of the Puerto Rican government’s (“PR Govt”) debt. Below is a summary of our thesis: US regulated bank – Since Puerto Rico (PR) is a territory of …… Read More
  • August 23, 2017: Capital One

    We believe Capital One stock is interesting because it has the best combination of growth and value among the super-regional banks. With its mix of national lending platforms and online deposit gathering franchises, Capital One has the best strategic positioning of super-regional banks. The company is posting the best growth rate among the credit card issuers. The non-promotional management team has been positive about the growth opportunities that they currently see. The company’s stock trades for less than 9.0x 2017 …… Read More
  • April 20, 2017: Kingstone Companies (KINS)

    We purchased additional common shares of Kingstone Companies, Inc. (NASDAQ: KINS) in late January when the company raised capital in a follow-on offering at $12 per share.  We’ve owned shares in Kingstone since their previous equity offering in December 2013 at $5.95. The shares have increased in value 25% since the recent equity offering. Please do not take this write-up as a recommendation to buy the shares today. We merely want to continue sharing our investment process with you. Kingstone …… Read More
  • September 21, 2016: OneMain Holdings (OMF)

    We purchased OneMain Holdings because it was trading 5x 2017 estimated EPS, and we believe it is a beneficiary of consolidation in the consumer unsecured lending business. We believe as the company realizes the cost savings from a recent major acquisition and deleverages through retaining earnings that the stock valuation will improve. OneMain Holdings is relatively new to the public markets, but the core operations of the company have a long history. The private equity firm Fortress Investments purchased AIG’s …… Read More
  • May 19, 2016: Voya Financial

    We’ve owned Voya Financial since its IPO in 2013 and believe it represents an extraordinary opportunity at current prices around $31. Voya Financial is the old U.S. subsidiary of ING, the Dutch insurance company. ING needed a bailout from the Dutch government during the financial crisis. One of the conditions of the bailout was ING had to divest its US operations. So, after renaming the subsidiary Voya, ING sold a stake through an IPO in 2013 and sold off the …… Read More
  • May 19, 2016: Colony Capital

    Colony Capital, Inc. (Colony) is a REIT focused on commercial real estate. In 2009, the company came public as Colony Financial and was a permanent capital vehicle managed by Colony Capital. The company invested in distressed real estate debt and equity. Over time, this opportunistic strategy led Colony to invest in a portfolio of industrial properties and another portfolio of single-family homes. Colony also originates first and mezzanine mortgages for commercial properties. The company is regarded as a sophisticated commercial …… Read More
  • January 1, 2016: Ambac Financial Group, Inc. (AMBC)

    We believe the equity of Ambac is mispriced due to several factors such as 1) being a post re-org equity, 2) crossover ownership from distressed credit funds who are forced sellers due to redemptions in their funds, 3) being a run-off business, 4) difficult to interpret financial statements; and, 5) valuation dependent on litigation. We also believe there are near-term catalysts that will help unlock value. Background of Ambac Company Description Ambac Financial Group, Inc. (AMBC) is a holding company …… Read More
  • May 11, 2015: Re/Max (RMAX)

    Business Summary: Re/Max is a high-quality franchised real-estate brokerage business. The company’s revenues are based mainly on the number of real estate agents working under the Re/Max banner. The company is a destination for high-producing agents because it has a higher payout ratio for commissions than competing real estate brokerage companies. However, the company charges its agents a higher-fixed fee to operate under the Re/Max banner. With this structure, real estate agents who have high productivity and are entrepreneurial are …… Read More
  • October 28, 2014: Janus Capital Group (JNS)

    Company Background: Janus Capital Group, Inc. (JNS), the well-known mutual fund company, recently hired Bill Gross from PIMCO. We believe this is a transformational event in the company’s history. Although the stock price is up on this news, we believe it does not fully reflect the increased value from the addition of Bill Gross. Therefore, we think JNS’s stock presents an interesting asymmetrical risk/reward opportunity at current prices. Investment Thesis: Hiring of Bill Gross is a transformational event: Bill Gross …… Read More
  • August 13, 2014: CIFC Corp. (CIFC)

    Company Background: CIFC creates and manages collateralized loan obligations (“CLOs”). CIFC originally went public as Deerfield Triarc Capital in 2005. Prior to the financial crisis, the company used its own balance sheet to invest in equity tranches of its own CLO and collateralized debt obligation (“CDO”) deals. This did not work out well in 2008, and the company suffered serious losses. However, because the company used structured securities instead of short-term debt to get leverage, the company did not have …… Read More
  • May 21, 2014: M&A in the Banking Sector

    Company Background: One important way Gator Capital is different from other investment managers that specialize in the Financials sector is that our portfolio has a much smaller position in mid‐sized regional banks. The difference in our view is that we are negative on the prospect for widespread banking M&A. Despite more than 7,000 banks still existing in the U.S., M&A activity among banks has been subdued. Through Q1 2013, there were only 44 bank M&A deals valued at a total …… Read More
  • March 12, 2014: Zions Bancorporations Warrants (ZIONW & ZIONZ)

    Company Background: We own warrants in Zions Bancorporation (Zions or “ZION”) for our clients. While the price of the warrants is very volatile, Gator Capital Management believes they present an interesting asymmetrical risk/reward situation that could produce high returns. Gator originally purchased ZIONZ when the Treasury auctioned their holding into the market. Since then, they have added to the position as the Fund has had in-flows. Zions actually has two warrant issues outstanding: ZIONW and ZIONZ. Both are listed on …… Read More
  • September 9, 2013: Ambac Financial Group, Inc. (AMBC)

    Company Background: Ambac is a monoline municipal bond insurance company. During the 2002-08 timeframe, Ambac wrote credit default swaps on collateralized debt-obligations (or “CDOs”) and insured non-agency mortgage bonds (or “RMBS”). The losses from this diversification forced Ambac to seek bankruptcy protection in 2010. In bankruptcy, Ambac’s debt was converted into equity and the old shareholders were wiped out. Ambac emerged from bankruptcy on May 1, 2013. Post-bankruptcy, Ambac presents an interesting asymmetrical risk/reward situation because of the potential that …… Read More
  • March 6, 2012: GSE Preferred Stock

    Despite public statements from the regulator, I believe there is a chance that Freddie Mac can earn its way out of its current indebtedness to the U.S. Treasury.  I believe the companies are healing more rapidly than is believed.  Their core business is profitable.  The 2009-2012 vintages of mortgage originations will be close to pristine.  If home prices improve from here, the losses on defaulted mortgages will decline.  If employment statistics continue to improve, I would expect mortgage delinquency statistics …… Read More

Sign up to receive Gator research

(We expect to email you 6-8 times per year)