Another View EQB is heavily involved with mortgages and reverse mortgage loans, so there is a general fear from investors that the housing market slowdown will negatively impact the company for some time. We feel that the company has a strong management team, has demonstrated impressive growth rates over the years, robust balance sheet, pays a yield of 2.7%, and is trading at a cheap valuation (2.8X sales, 5.1X forward P/E, and 0.8X book). EQB will report after the close today, and while it may be negatively impacted by a challenging market, we believe its long-term growth story, strong industry position and management team will pave a bright future for the company. Expectations are for a ~15% increase in revenue for this quarter.
It is cheap, is growing profitability, has a solid ROE, and we think it is going to grow its market share over time. We like this name for a long-term hold. (5iResearch)