MFIC
MidCap Financial Investment Corporation
$10.28
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 68.9% below fair value
You pay
$10.28
Bear
$23.11
Fair
$33.02
Bull
$42.93
Bear
$23.11
+124.8%
ROTCE 4.0% → 0.30x TBV
Fair
$33.02
+221.2%
ROTCE 4.8% → 0.30x TBV
Bull
$42.93
+317.6%
ROTCE 5.6% → 0.39x TBV
Adjust Assumptions
4.8%
8.0%
Key Value Driver
ROTCE (4.8%) vs. cost of equity (8.0%)
Implied Market Multiple
0.65x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$10.92
Divergence from AlphaVal
202%
Summary
With ROTCE of 4.8% vs. 8.0% cost of equity, fair P/TBV is 0.30x on $15.87 tangible book, implying $33.02 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.
Return on equity (4.8%) is below the minimum investors require (8.0%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $10.92 (from 14 analysts). Our estimate is 202% above the consensus -- consider that gap carefully.
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