Stock Conversions Produce a 101% Average Return
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I started off small in the 1990s with bank stock conversions by typically purchasing one or two hundred stocks in an IPO. My success with the bank conversions finally let me buy thousands of shares in more contemporary IPOs. The account outline below shows some of the mutual bank stocks I bought in an IPO in the 1990s. The cost of the 2,589 shares was $25,890 (2,589 x $10 per share = $25,890). The market value was $52,103 leading to a $26,213 profit and a 101% return. Market Price of $52,103 Minus Cost of $25,890 = Profit of $26,213 Purchasing Conversion Stock in a Community Offering Depositors at mutual banks have priority subscription rights in the event the bank makes a decision to convert to stock possession. It's feasible to get IPO stock whether or not you don't have a deposit account at the changing bank. Sometimes depositors with priority rights don't purchase all of the available stock making it available to the public in what is known as a Community Offering. Examples of Community Offerings would include the Port Money, Hudson City Bancorp and Connecticut Bancshares conversions. So as to purchase stock in the Community Offering you must call the bank and obtain a stock order form and prospectus. The stock order form must be finished and returned to the bank before the Subscription Offering Cut off point. A check to cover the quantity of shares bought must be included with the stock order form. It typically takes one or two weeks after the Subscription Offering Cut-off point for the stock to be allotted and for stock certificates to be mailed to clients. Examples of MHC Second Stage Offerings Enclosed on the following several pages are stock price charts of Mutual Holding Companies that conducted Second Stage Offerings. This sample of price charts reflects the price movement of the minority stock before the finishing of a MHC Second Stage Offering. Spot the price appreciation realized by minority investors before the 2nd stage conversion. MHC Technique Current Profit Results I make trade recommendations for MHC stocks which can sometimes be bought in a brokerage account through my advisory service. The table below lists the prevailing open trade profit results for the MHC System. The portfolio currently has $59,323.30 in open trade profits with a typical return of 34.8% before commissions. Many MHC stocks are regarded as worth stocks as they usually have a good Price to Order values and significant money on their balance sheets re stock cost.