On August 30, 2023, Basswood Capital Management, L.L.C. made a significant move in the stock market by reducing its stake in Dime Community Bancshares Inc (DCOM, Financial). The firm sold 1,400,363 shares, representing a 68.97% decrease in its holdings. This transaction had a -2.23% impact on the firm's portfolio, leaving it with 629,970 shares of DCOM, which now represents 1.03% of its portfolio and 1.62% of DCOM's total shares.
About Basswood Capital Management, L.L.C.
Basswood Capital Management, L.L.C., an investment management firm based in New York City, was established in 1998. The firm conducts its research internally, utilizing a fundamental methodology to make its investment decisions. It invests in the value stocks of companies and event-driven strategies, focusing on the public equity and fixed income markets on a global scale. The firm's top holdings include Bank of America Corp(BAC, Financial), JPMorgan Chase & Co(JPM, Financial), Lennar Corp(LEN, Financial), OneMain Holdings Inc(OMF, Financial), and Webster Financial Corp(WBS, Financial). The firm's portfolio is heavily invested in the finance sector, which alone makes up over three quarters of the firm’s total asset allocations. The firm manages over $2.2 billion in total assets under management spread across 17 total accounts.
Overview of Dime Community Bancshares Inc
Dime Community Bancshares Inc, a holding company based in the USA, was established on June 26, 1996. The company gathers deposits from customers within its market area and via the internet, and invests them in multifamily residential, commercial real estate, commercial and industrial (C&I) loans, and one-to-four family residential real estate loans, as well as mortgage-backed securities, obligations of the U.S. government and government-sponsored enterprises (GSEs), and corporate debt and equity securities. As of September 1, 2023, the company has a market capitalization of $864.678 million and a stock price of $22.27. The company's PE percentage stands at 6.27, indicating its profitability.
Analysis of DCOM's Performance
DCOM's GF Valuation is significantly undervalued with a GF Value of 33.40, and a Price to GF Value ratio of 0.67. Since its IPO, the stock has gained 543.64%, and despite a year-to-date decrease of 30.08%, the stock has gained 3.05% since the transaction. The stock's GF Score is 78/100, indicating a likely average performance in the future.
Evaluation of DCOM's Financial Health
DCOM's financial health is reflected in its Balance Sheet Rank of 3/10, Profitability Rank of 6/10, and Growth Rank of 8/10. The company's Piotroski F-Score is 7, indicating a healthy situation. However, its Altman Z score is 0.00, and its Cash to Debt ratio is 0.27, which may indicate potential financial difficulties.
Examination of DCOM's Industry Performance
DCOM operates in the banking industry and has a ROE of 12.35 and a ROA of 1.09. The company's 3-year revenue growth is 16.40%, and its 3-year earning growth is 34.00%. However, the company's gross margin growth and operating margin growth are both 0.00, indicating a lack of growth in these areas.
Analysis of DCOM's Momentum
DCOM's RSI 5 Day is 37.29, its RSI 9 Day is 41.28, and its RSI 14 Day is 46.69. The stock's Momentum Index 6 - 1 Month is -26.89, and its Momentum Index 12 - 1 Month is -28.34, indicating a downward momentum in the stock's price.
Conclusion
In conclusion, Basswood Capital Management, L.L.C.'s recent reduction in its stake in Dime Community Bancshares Inc is a significant move that has impacted both the firm's portfolio and the stock's performance. Despite some potential financial difficulties, DCOM's performance and growth potential make it a stock to watch for value investors. However, the downward momentum in the stock's price may be a cause for concern. As always, investors are advised to conduct their own thorough research before making any investment decisions.
