GAM
General American Investors Company, Inc.
$64.18
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 85.3% below fair value
You pay
$64.18
Bear
$305.76
Fair
$436.80
Bull
$567.84
Bear
$305.76
+376.4%
ROTCE 14.5% → 2.19x TBV
Fair
$436.80
+580.6%
ROTCE 19.4% → 3.20x TBV
Bull
$567.84
+784.8%
ROTCE 22.3% → 3.80x TBV
Key Value Driver
ROTCE (19.4%) vs. cost of equity (8.8%)
Implied Market Multiple
0.88x
Summary
With ROTCE of 19.4% vs. 8.8% cost of equity, fair P/TBV is 3.20x on $73.21 tangible book, implying $436.80 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