4 Banking Stocks With Compelling Fundamentals, Bullish Charts

By | April 14, 2016

Scalper1 News

Earnings from large-cap, widely held financial stocks have made headlines this week, but whether or not they’re ready to start bona fide uptrends remains to be seen as many are still far off highs. But several banking-related sub-groups in IBD’s database are serving up compelling prospects with bullish charts that don’t get a lot of attention. IBD’s Banks-West/Southwest industry group has rallied 6.3% in the past five sessions compared to a 2% gain for the S&P 500. Headed into Thursday, the group ranked in the bottom half of IBD’s 197 industry groups after a 23% pullback. Several stocks sport high Composite Ratings, but many are small and thinly traded. But there are a couple of bright spots. San Francisco-based First Republic ( FRC ) broke out powerfully Thursday after reporting strong earnings before the open. Shares rose 3.5%, closing 2% above a 68.51 buy point. Quarterly profit jumped 28% from a year ago, and revenue growth accelerated for the second straight quarter, rising 21% to $554.8 million. It also raised its quarterly dividend 7% to 16 cents a share, giving it an annualized yield of 0.9%. Western Alliance Bancorp ( WAL ) is also acting well in the group. The stock extended gains Thursday after a breakout from a cup-with-handle base with a 34.46 buy point. Shares rose 27 cents to 35.44. Big revenue growth in recent quarters is a result of its acquisition last year of San Jose-based Bridge Capital Holding and Bridge Bank for $425 million. The buy gave Western Alliance a new growth opportunity in technology-related banking in the Silicon Valley. In its latest reported quarter, earnings rose 24% from a year ago with revenue up 36% to $160.8 million. For the current quarter, analysts expect revenue to increase 50% to $164.3 million. Earnings are due April 21 after the close. Meanwhile, the Banks-Midwest group is also serving up some interesting names. Missouri-based Commerce Bancshares ( CBSH ) is near a 45.91 cup-with-handle buy point on the heels of Wednesday’s earnings that showed accelerating earnings and sales growth, helped by strong gains in loans and deposits. Profit rose 12% from a year ago. Revenue also increased 12% to $291.1 million. Recent initiatives in the mortgage banking area are expected to boost results going forward. At first glance, Chicago-based PrivateBancorp ’s ( PVTB ) weekly chart shows a cup-with-handle base with a 40.28 buy point. But the handle comes up just short on the midpoint test. A proper handle should form in the upper half of a stock’s base. The midpoint of PrivateBancorp’s current base is 38.49. The midpoint of the handle is 38.27. Technically, that’s in the lower half but a breakout could still work. PrivateBancorp joined the S&P Midcap 400 in late February. Earnings are due April 21 before the open. It’s expected to report a fifth straight quarter of double-digit earnings growth. Scalper1 News

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