Stock (Symbol) |
Home BancShares (HOMB) |
Stock Price |
$42 |
Sector |
| Financial |
Data is as of |
| May 23, 2016 |
Expected to Report |
| Jul 14 – Jul 18 |
Company Description |
 Home BancShares, Inc. is a bank holding company. The company is primarily engaged in providing a range of commercial and retail banking and related financial services to businesses, real estate developers and investors, individuals and municipalities through its wholly owned community bank subsidiary, Centennial Bank (the Bank). The Bank has locations in Arkansas, Florida and South Alabama. The Company provides loans to single and multi-family real estate, residential construction and commercial buildings. In addition, it also makes loans to small and medium-sized commercial businesses, as well as to consumers. Securities held to maturity include any security for which the Company has the positive intent and ability to hold until maturity. It offers a range of deposit services, including checking, savings, money market accounts and certificates of deposit. The Company obtains its deposits from individuals and small businesses and municipalities in its market areas. Source: Thomson Financial |
Sharek’s Take |
 The Federal Reserve has been hinting of an interest rate increase coming as early as next month, and investors have taken notice by sending up shares of regional bank stocks this week. Of the group, Home BancShares (HOMB) is one of the fastest growing in the US, and is my favorite. Headquartered in Conway, ARK this bank is mainly in Arkansas, but has expanded into Florida and just opened a loan production office in New York. The company specializes in acquiring small banks then cleaning up their messes & cutting costs to get a better profit margins (they don’t give risky good-ole-boy favors). Florida is where a lot of opportunity lies, as it’s a fast growing market with low taxes. The New York branch is great due to real estate and renovation financing. HOMB has grown profits in the high-teens during the past decade (on average) without a down year. The stock pays a 1.5% dividend, and with a P/E of 17 is nicely priced. I feel HOMB is a solid choice for growth investors looking for a regional bank stock. |
One Year Chart |
 Last qtr HOMB clocked in with 28% profit growth last qtr on a 25% gain in sales. The company beat the street by 2 cents and has beaten estimates in each of the last 4 qtrs. 2016 profit estimates ticked up from $2.39 to $2.42. Qtrly profit growth estimates for the next 4 qtrs are 18%, 17%, 17% and 3%. Management continues to look for banks to acquire, which could boost estimates, and has a letter of intent out with a Florida bank. Analysts don’t have an Est. LTG but I consider this is a 17% grower. |
Fair Value |
 Profits didn’t fall during the 2008-2009 recession and have grown every year since. The past couple of years HOMB has sold for 19x earnings. I think that’s a fair valuation. My 2016 Fair Value is $46 and 2017’s is $50. |
Bottom Line |
 Home BancShares is one of the few bank stocks that’s done well this past decade, and an increase in interest rates could push profits up a notch. As could more acquisitions. HOMB is my favorite regional bank and the sector has just gotten hot. This stock ranks 26th of 39 stocks in the Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
26 of 39Aggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
