United Bancorporation Of Alabama Inc (UBAB): Alluvial Capital Management’s Most Successful Bank Investment
Alluvial Capital Management, an investment advisory firm, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund had a good second quarter rising 3.9% and its year-to-date return was 10.4%. However, comparable indexes sputtered. The Russell Micro-Cap Index dropped 5.3%, entering negative territory for 2024 while, The Russell 2000 Index dropped 3.3%, resulting in a 1.7% year-to-date return. In addition, you can check the fund's top 5 holdings to determine its best picks for 2024.
Alluvial Capital Management highlighted stocks like United Bancorporation of Alabama, Inc. (OTC:UBAB) in its Q2 2024 investor letter. United Bancorporation of Alabama, Inc. (OTC:UBAB) is a bank holding company for United Bank that provides banking services. The one-month return of United Bancorporation of Alabama, Inc. (OTC:UBAB) was 7.83%, and its shares gained 32.06% of their value over the last 52 weeks. On August 22, 2024, United Bancorporation of Alabama, Inc. (OTC:UBAB) stock closed at $50.95 per share with a market capitalization of $180.774 million.
Alluvial Capital Management stated the following regarding United Bancorporation of Alabama, Inc. (OTC:UBAB) in its Q2 2024 investor letter:
"Our collection of various banks, mainly ECIP recipients, is quietly having a good year. 2023 was marked by endless handwringing over regional bank balance sheets and worries about fleeing depositors. But community banks really are a different kind of animal, and it was business as usual for our holdings. Our most successful bank investment has been United Bancorporation of Alabama, Inc. (OTC:UBAB), up 19% this year and 70% from our average cost. The Bank has excelled in developing specialty loan offerings and grant-subsidized business lines, resulting in record earnings and return on equity. Despite the upward move, shares trade at only 5.7x trailing earnings and 80% of adjusted tangible book value. We continue to accumulate shares in some even smaller, lesser-known community banks, especially those with significant non-banking revenue streams like merchant payment processing."
Hands typing on a laptop, demonstrating the company's online banking services.
United Bancorporation of Alabama, Inc. (OTC:UBAB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. While we acknowledge the potential of United Bancorporation of Alabama, Inc. (OTC:UBAB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.