Wednesday, July 06, 2011

RSY: This Bank (BRKL) Even Washes Your Clothes...Maybe a Window or Two?

Well, maybe not directly, but they certainly are a facilitator of financing for the coin laundry, convenience store, and dry cleaning industries. Eastern Funding LLC is a division of Brookline Bank (NASDAQ: BRKL) which Powers the Laundry Business. Drycleaning and Laundry Services have suffered from the Great Recession like most other industries, but provides long term growth that should be resistant to demographic and structural economic changes. The first graph below shows the slump since 2008 in revenue per firm, and the second graph shows the projected market forecasts up to 2015.

Sabrient rates BRKL as a Strong Buy despite its modest scores for value, growth and momentum. BRKL exhibits a combination of core attributes that are in favor with today's market. For Rock Solid Yields (RSY) investors, we also are interested in Earnings Score, Balance Sheet Score and Fundamental Score which are below industry average for Earnings Score but above average in the industry and S&P 600 for the other two scores.

While this might not be the most exciting stock out there, it should provide stable earnings for the foreseeable future. The forensic accounting score is above average and mergers and acquisitions appear to be the only flag of significance going forward including the merger with Bancorp Rhode Island, Inc. by the end of 2011. Overall, BRKL should match the market over the next six months with less than average risk. A combination we look for in the RSY portfolio holdings. It also provides a dividend yield of over 3 1/2%.

The one issue we have is that we recently added a couple of regional banks to our portfolio with FNLC and PULB. Along with our two long-term holdings of NGPC and GAIN, we are sitting on over 11% of portfolio in the financial sector presently (based on $100,000 portfolio). The latest ex-dividend dates for FNLC and PULB were the first and sixth of this month and thus a good time to unload a portion of either or both. We can be patient on selling these as there is no pressing need now so both orders will be Good-Til-Canceled (GTC). RSY recommends a limit sell order of 200 shares of PULB (1/2 long position) at $7.49 (GTC), and 200 shares of FNLC (1/2 long position) at $14.89 (GTC).

RSY recommends a buy limit order of 400 shares of BRKL at $9.29 (GTC).

StockScouter Stock Rating System - Brookline Bancorp Inc (BRKL) - MSN Money
Brookline Bancorp Inc, a small-cap growth company in the finance sector, is expected to match the market over the next six months with less than average risk.

The Love of Building
Another $20 plus million spent on building and renovations for a foot print in Boston. Will Perrault next change the franchise name to New Clarendon Bank?
Millions in shareholders equity again gone. Perrault's real design is to be
among Boston's elite banking community on our buck, then bolt for bigger and better.
The Brkl BD's have all lost their minds in this grow to sell mentality in questionable areas of growth.

What's next ? Oh yes, the purchase of a Boston down town parking garage.. for Perraults business car of course.

Eastern Funding Powers the Laundry Business

Audit Integrity AGR:
Average (66)

Econbrowser: Will a Tax Repatration Holiday Spur Investment?

CARPE DIEM: Bastiat's One-Hand Solution to Job Losses

S&P 500 sector pie chart


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