December 31, 2014

Doug Kass buying Northwest Bancshares (NWBI)

I am back buying Northwest Bancshares  (NWBI) based on the following considerations:

- The price of crude may be bottoming -- NWBI is positioned in Western Pennsylvania's shale country.

- The recent add-on acquisition is a wise one and expands the bank geographically into the Cleveland and Akron markets. The deal was done at an attractive price.

- The stock has lagged the regional and money center bank groups.

- I continue to admire the holding company's capital strategy of returning capital (dividends) to shareholders.

- A reasonable yield and an active repurchase program.

This is a conservative holding, and my objective is for a 10%+ return over the next 12 months. The bank is a potential takeover candidate and its private market value is likely in the $16 to $17 per share area.