AAMI
Acadian Asset Management
$81.66
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 23.6% above fair value
You pay
$81.66
Bear
$46.26
Fair
$66.09
Bull
$85.92
Bear
$46.26
-43.3%
ROTCE 20.0% → 2.10x TBV
Fair
$66.09
-19.1%
ROTCE 25.0% → 4.00x TBV
Bull
$85.92
+5.2%
ROTCE 30.0% → 3.41x TBV
Key Value Driver
ROTCE (132.0%) vs. cost of equity (11.6%)
Implied Market Multiple
48.01x
Summary
With ROTCE of 132.0% vs. 11.6% cost of equity, fair P/TBV is 4.00x on $1.70 tangible book, implying $66.09 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly