In his Financial Services model, Andy Schornack invests in positions within the financial services and real estate sectors. Before buying a position, he conducts a detailed financial analysis as part of his bottom-up approach. The model takes long positions only and limits investments to U.S. equities. He also looks for companies with stable dividends that are trading at a discount to fair market value.
The top holding in the model is the CommonWealth REIT (NYSE: CWH). This trust has a diverse collection of office and industrial real estate holdings located throughout the United States. According to their 2009 Annual Report, the REIT owns almost one-third of the shares of the Government Properties Income Trust, and the majority of the tenants of the properties in that trust are government tenants. On September 22nd, 2010, CWH had a dividend yield of 7.70 percent. In 2009, their net revenues increased to $850.9 million, from $835.5 million the year before. Their total liabilities grew from $3.1 billion in 2008 to $3.2 billion in 2009, though they were reduced to $3.1 billion as of the first quarter of 2010.
Another top holding in the model is New York Community Bancorp Inc (NYSE: NYB). On September 22nd, 2010, NYB had a dividend yield of 6.23 percent. NYB’s net revenues grew from $1.7 billion in 2008 to $1.9 billion in 2009 while their net income rose from $77.9 million in 2008 to $398.6 million in 2009. Their earnings per share also increased from just $0.23 in 2008 to $1.13 in 2009. Outstanding shares of NYB went from 345 million in 2008 to 433.2 million in 2009, and their total liabilities grew to $36.7 billion—up from the $28.1 billion they reported in 2008.
