Purchased Texas Capital Bancshares (TCBI):
- Highly respected Dallas, Texas based business bank
- Limited branch network relative to asset size
- Texas economy, and Dallas metro specifically, remains one of most vibrant in nation
- Company refocusing after couple years of losing their way
- Problem loans falling, even in shadow of COVID Recession, as bank refocuses
- Believe may have excess reserves for estimated COVID Recession losses
- Stock price down nearly 60% from 2018 peak when purchased
- Trading around 70% of book value and approximately 6x normalized earnings when purchased
Added to Geospace Technologies (GEOS):
- Debt-free pioneering developer of seismic equipment for oil & gas industry and burgeoning border security market
- Stock price under pressure during COVID’s weight on market
- Stock price down with prospect for additional oil and gas reservoir monitoring orders improving while border security contract renewal likely drawing closer
- Trading approximately half of book value at time of purchase
Trimmed Green Brick Partners (GRBK):
- Quality return on capital focused homebuilder with low leverage
- Operate in high population growth and housing growth markets – primarily Dallas & Atlanta
- Direct beneficiary of housing shortage caused by lower interest rates and preference to own a home during pandemic
- Management team effectively executing
- Stock price up nearly 100% this year
- Second time this year took money off table to redeploy to companies with higher forecasted upside