Royce Micro-Cap Trust, Inc. logo RMT - Royce Micro-Cap Trust, Inc.

Price: -- --
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Undervalued Strong
Trading 60.4% below fair value
Current Price $13.74
Bear Case $24.28 76.7% upside ($24.28 - $13.74) / $13.74 = 76.7% ROTCE 10.4% → 0.92x TBV
Fair Value $34.68 152.4% upside ($34.68 - $13.74) / $13.74 = 152.4% ROTCE 13.9% → 1.42x TBV
Bull Case $45.08 228.1% upside ($45.08 - $13.74) / $13.74 = 228.1% ROTCE 16.0% → 1.72x TBV

Adjust Assumptions

13.9%
11.0%

Key Value Driver

ROTCE (13.9%) vs. cost of equity (11.0%)

Implied Market Multiple 1.16x

Plain-Language Summary

With ROTCE of 13.9% vs. 11.0% cost of equity, fair P/TBV is 1.42x on $11.80 tangible book, implying $34.68 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