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BofI decline makes it 'stock to watch'

After a 20 percent drop in the stock price in BofI Holding (Nasdaq: BOFI) over the past week, it has been picked as a “stock to watch” by Motley Fool banking analyst Matt Argersinger, who argues that the sell-off could represent a buying opportunity for investors.

Over the past two weeks, BofI has fallen from an all-time high of $106.55 to $83.86 at noon Tuesday on Wall Street.

Argersinger ties the free-fall to a negative commentary in the Seeking Alpha website by Greenwich Research Group, a hedge-fund manager with a short position on BofI, meaning that it essentially has placed bets that the stock would go down. “BofI Holding: A Bank Model Fraught with Peril,” reads the headline on the commentary, which warns that the company’s Internet-only business model is flawed.

“If you break down the article, what it really comes down to is that BofI is an expensive stock. And it is,” Argersinger said. “But it’s also growing really fast and demonstrating why it deserves a richer multiple than other banks.”

Dave Koppenheffer -- who writes columns on the financial industry for Motley Fool -- wrote a column shortly before Greenwich’s, saying that “From every conceivable angle, the future is favoring BofI's model. I thought it was impossible to have strong margins with high cost deposits, or make good loans without boots on the ground. But BofI has accomplished both of those feats.”

Koppenheffer said he still believes some well-managed bricks-and-mortar chains like Wells Fargo (NYSE: WFC) may be a better bet in the long-run because of its extensive network, together with a healthy reserve of cash that gives it time to respond to Internet-only operations.

But Koppenheffer added that “the way we interact with our money changes with each passing day, and whether they like it or not, traditional banks are in for a massive reality check,” which could benefit an untraditional operation like BofI.

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BofI Federal Bank

Company Website

12777 High Bluff Dr., 100
San Diego, CA 92130

Company Trade Data

Stock Symbol Close
Change
Chg %Chg
Volume
52-Week
High Low
BOFI
100.78
  -17.58  
- 14.85%
1,568,991,000
143.92
64.72

Insider Trade Data

Date Insider Shares Type Value
08/27/2015 Ratinoff, Edward James 2,000 Sell $243,712
08/25/2015 Ratinoff, Edward James 1,073 Sell $131,174
08/18/2015 Court, James John 1,282 Sell $168,647
08/18/2015 Court, James John 1,282 Sell $168,647
08/13/2015 Allrich, Theodore C 4,319 Sell $563,997

BofI Federal Bank Executive(s):

Greg Garrabrants

  • Chief Executive Officer, President

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Interview with Greg Garrabrants

April 7, 2011 -- Executive Editor George Chamberlin speaks with Greg Garrabrants, president/CEO of Bank of Internet, about various banking issues including lending and regulatory concerns.

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NAICS - 522120 - Savings Institutions