Every week on Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, each discuss one stock that's on their radar. This week, Moser tells listeners why Amalgamated Bank (AMAL +0.82%) has found itself on his watchlist, and Frankel explains why the next few months could be very interesting for Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B).
A full transcript follows the video.
This video was recorded on March 4, 2019.
Jason Moser: Matt, let's jump into closing out the week here with "One to Watch." Given where you are in Vegas right there, anything coming to the top of your mind? What's your "One to Watch" this week?
Matt Frankel: My "One to Watch" is not a Vegas stock. I'm looking at Berkshire this week.
Moser: All that risk out there in Vegas, you're trying to mitigate a little bit.
Frankel: I'm looking at Berkshire as my "One to Watch" this week. Berkshire has over $112 billion in cash. The rumors are really starting to ramp up that Warren Buffett is antsy for an acquisition. Southwest Airlines is the latest big rumor. That's why Southwest Airlines spiked last week. Not that he's necessarily going to acquire that one, but he's definitely got the itch. He wants to acquire a big company. I think it's going to finally happen sooner rather than later. I have my eye on Berkshire. I'm considering adding to my already large position in it. I know you're a Markel fan, but I think Berkshire is going to have a very interesting first half of 2019.
Moser: I get my dose of Berkshire through my ownership of Markel. Maybe it's that sort of second-level investing. Really quick, do you have your eye on any companies you think Berkshire might be looking at? Any thoughts there? We're talking big deals here, anything strike you?
Frankel: There's companies I think Berkshire should acquire, not that they necessarily will. I would actually love to see them acquire Southwest Airlines. That would be a very cool, big, needle-moving acquisition. I'd love to see them expand their holdings in the energy space, which is an area Buffett wanted to make a big acquisition last year but it fell through. There's a bunch of interesting possibilities. Value has been the big roadblock lately. It just depends what Warren Buffett sees the most value in at any given time.
Moser: Man, it just crossed my mind here. What if Buffett wants to acquire Square? I know I was saying Apple acquiring Square was my reckless prediction for 2019, but clearly, they've been looking at some payments companies and he's had a good track record with American Express. What if?
Frankel: I would love to see Square join the Buffett universe, even as just a stock investment, I'd love to see it join his portfolio.
Moser: He'd give Jack all the room in the world to keep running the business the way he wants. Crazier things could happen. That would be a size-y one.
I'm going a little bit the other way here, going to take a close look at Amalgamated Bank, ticker AMAL. This past week in Austin, I was speaking with one of our listeners and members, Neil Grayson. Neil's a fellow Wofford alumnus, Matt. Have I mentioned to you that I went to Wofford College?
Frankel: You have, many times.
Moser: Have I told you about how good Wofford's basketball team is this year?
Frankel: Didn't you guys beat us earlier in the season?
Moser: Listen, man, Wofford is top 25 in the country at this point now, after running the tables in the Southern Conference, 18 and over the year. They appear to be a shoo-in for the big dance regardless of what happens in the Southern Conference. Now, of course we want to see that victory come through as well. Tremendous year. But I digress.
My Amalgamated Bank idea here is thanks to Neil. Neil, thanks! Small-cap bank in New York. Fairly new, with an IPO that happened just less than a year ago. Total deposits of $4.1 billion. An advantage there in a low-cost deposit base. Total assets of $4.7 billion. Smaller than that small-cap Georgia bank I've been talking about so much here, Ameris Bancorp, but it seems very similar in a lot of ways. Neil thought I'd be interested, so I'm going to dig in a little bit further there and see if we can't come up with some reasons maybe to get this name out there in front of members and listeners and the world.
Check out the latest earnings call transcript for Amalgamated Bank.
