The underlying methodology of our quantitative equity models is to identify companies/stocks that are very attractively priced – including debt- so as to be potential targets for acquisition.

One such holding Wilshire Bancorp symbol WIBC announced today that it will be acquired by BBCN Bancorp for $13 a share.

Lets take a look at the valuation of WIBC pre-merger:

Enterprise Value: $651m
EBITDA (trailing 12 months): $101.3m

Earnings Yield: 15.5%

On of the factors that made WIBC so attractive and why using Market Capitalization as the basis of valuation incorrect was the fact WIBC has $6.52 a share in cash and very little debt.  The cash can then be used to reduce the cost of acquisition.

No longer long WIBC