Episode summary
Tim Melvin: Finding Value Where Wall Street Isn’t Looking
The Acquirers Podcast
· · 1 hr 3 min · Hosts: Tobias Carlisle, Jake Taylor
Summary
Tim Melvin argues that the best opportunities are still in areas Wall Street has largely written off: small community banks, selected REITs, closed-end funds, and preferred stocks. He says the regional banking scare was overstated, that credit quality at smaller banks remains strong, and that the biggest risks were concentrated in a few badly run institutions rather than the industry as a whole. He prefers banks trading around 80% of tangible book or less, with high capital and negligible loan losses, and he says the cheap names are getting harder to find as valuations have already moved up.
Key takeaways
- Melvin says community banks remain attractive because capital is high and loan quality is still strong, especially outside problem commercial real estate pockets.
- He prefers buying banks around 80% of tangible book value with negligible loan losses and lots of capital.
- He likes real estate where cash flow is resilient, including VICI, GLPI, Cousins, ADC, and CTO, because many properties are full and trading below net asset value.
- He sees closed-end funds and listed private credit vehicles as discount-to-NAV opportunities where activism and asset realization can narrow the gap.
- He thinks preferred stocks could benefit if rates come down, and he highlights specific bank preferreds such as Fulton, First Citizens, and Merchants Bank of Indiana.
Notable quotes
“Credit's way better than anybody's giving these guys credit for because you know the old joke is, you know, banker somebody who won't won't make you a loan if you need one”
“I'm looking at banks I want to buy them 80% of tangible book value with negligible negligible loan losses and lots of capital”
“the only weak spot out there I see is offices. When I look at warehouses, they're full. When I look at apartments, occupancy rates are pretty high”
“I want the discount. I want the nice yield and I want an activist”
“Rates have got to come down. When they do, these heavily discounted preferred are going to be pretty profitable”
How the episode opens
This is Value After Hours. I'm Tobias Carile. Jake is on a break today. Uh special guest today is Tim Melvin. He's a returning guest. We've had him on quite a few times. How are you, Tim? Good to see you again.
I am fantastic. I'm learning, you know, how to live with winter again being in North Carolina after moving up here from Florida. And uh it's it's threatening to go below 70 today. I'm not I may panic. I don't know.
Rug up. Wear something warm. Um, you're in one of the more interesting, you like one of the more interesting areas of the economy. And I mean that in the Chinese cursed sense of the word, uh, — Financials, community banks, what's been happening there?
Well, I mean, the headlines are awful, as you know. I mean, stable coins are going to make banks all just go away. All of the bond losses are going to collapse every bank that ever lived. And so when you read the headlines and they've been awful since really 2023 when we went through all of u the silvergate and
That was SVB was it — Silicon Valley Bank and yeah all that and you know the banking crisis that wasn't is what I like to call it because it was four bankers that did — Really stupid stuff
And collapsed and we decided that was an absolute banking crisis and it wasn't. wish it would happen again because it was this tremendous buying opportunity. Um, but banks are starting to report and as the earnings come in and you're going through them and once again it's going to be it's getting very repetitive, right?
Credit's way better than anybody's giving these guys credit for because you know the old joke is, you know, banker somebody who won't won't make you a loan if you need one.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- value investing
- market crashes
- portfolio risk management
- hedging strategies
- tranche investing
Companies and tickers mentioned
- AMZN
- Amazon
Watch the episode
Watch “Tim Melvin: Finding Value Where Wall Street Isn’t Looking” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Acquirers Podcast, this episode and its artwork belong to Tobias Carlisle. Octagon is not affiliated with the show; this page is an independent summary.
