Farmers & Merchants Bancorp: Shares Still Attractive Despite Recent Gains

Mark Dockray 2.27K Followers Follow Summary Shares of Farmers & Merchants Bancorp have finally woken up, returning around 50% since my previous update last November. Cheaper funding and fixed-asset repricing have contributed to FMCB's recent margin expansion. While the former will fade now that rates are rising again, the latter still has room to run. Credit quality remains excellent, with net charge-offs and non-performing assets at trivial levels relative to total loans. Trading for less than 8 times earnings when I last covered it, FMCB's recent share price appreciation still leaves its valuation at an attractive level. Maguey Images/DigitalVision via Getty Images Investing in the over-the-counter market can be a frustrating experience. With liquidity usually much lower compared to the regular market, stocks often don't behave in the way we would want to with events like quarterly earnings, especially This article was written by Mark Dockray 2.27K Followers Follow I like to take a long term, buy-and-hold approach to investing, with a bias toward stocks that can sustainably post high quality earnings. Mostly found in the dividend and income section. Blog about various US/Canadian stocks at 'The Compound Investor', and predominantly UK names on 'The UK Income Investor'. Analyst’s Disclosure: I/we have a beneficial long position in the shares of FMCB either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.