Stock (Symbol) |
Home BancShares (HOMB) |
Stock Price |
$40 |
Sector |
| Financial |
Data is as of |
| February 29, 2016 |
Expected to Report |
| Apr 14 – Apr 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. Source: Thomson Financial |
Sharek’s Take |
 Home BancShares (HOMB) is one of the fastest growing regional banks in the US. 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 because there’s a a whole lot of real estate financing, including renovations. HOMB is the fastest growing regional bank I’m aware of, and grew profits 15% a year during the past decade — without a down year. The stock pays a 1.5% dividend, and at 17x earnings is slightly undervalued. I will purchase the stock for the Growth Portfolio today. |
One Year Chart |
 Nice profit growth recently, which I feel got investor interest. Still, the stock is off its highs. Last qtr the company posted 23% profit growth on a solid 25% rise in sales. Growth via acquisition looks to remain strong for two-to-three more qtrs. Estimates show 24%, 18%, 17% and 17% profit growth for the next 4 qtrs. P/E of 17 is reasonable. |
Fair Value |
 I’m very surprised the company didn’t have a downturn in profits during the 2008-2009 period. Also note the stock has had a P/E fo 19 to 21 on numerous occasions. My Fair Value is 19x earnings, or $45 a share this year and $50 next year. |
Bottom Line |
 Home BancShares takes me back to decades past when I was in Memphis, TN and regional banks were good investments. This bank is located West of Memphis, just over the Mississippi, but does business like city boys, expanding into New York and growing via bank buyouts in fast-paced Florida. I will buy HOMB in the Growth Portfolio where it will rank 21st of 36 stocks in the Power Rankings. |
Power Rankings |
Growth Stock Portfolio
21 of 36Aggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
