Background: Hilltop Holdings Inc. (HTH) operates as the holding company for PlainsCapital Bank that provides business and consumer banking services in Texas in the form of company’ Banking, Mortgage Origination, Company’ Insurance, and Financial Advising.

Why GEO Investing chose to delve into this story:  

  • GeoInvesting Identified HTH an arbitrage opportunity that had yet to be fully digested by the market.
  • GeoInvesting found the positive impacts that an acquisition deal with Plains Capital would have on the Company’s valuation, such as introduce improved predictability and consistency to overall operations, increase HTH shareholder equity by nearly 90% and possibly create significant EPS accretion.
  • GeoInvesting offered realistic valuation scenarios discussing the modest upside to investing in HTH shares.

Action Steps: Go long shares HTH at $13.20 per share on November 1, 2012

Results: A $10,000 long investment in Hilltop Holdings Inc. (HTH) resulted in a $9,400 profit, or a peak return of 94%.