This financial stock is hitting an all-time high
Even though interest rates have risen this year, most financial stocks have tumbled, as many banks and financial institutions sounded the alarm over the dire economic outlook. JPMorgan Chase CEO Jamie Dimon is even predicting an economic “storm” due to rising inflation, interest rate hikes from the Fed and the war in Ukraine.
The Fed is beginning to unwind its balance sheet, a process known as quantitative tightening, as well as embark on its rate hike journey. Dimon said the market isn’t ready for this, and it’s something that people will “write in the history books for 50 years.” Tone sharply departed from Dimon’s sentiment at an analyst meeting late last month, where the bank’s CEO was slightly more upbeat on the economic outlook.
Although financial stocks may not necessarily have performed the best of the year, they have performed relatively well. The Zacks Finance sector is ranked in the top 38% of all 15 sectors, and has outperformed the S&P 500 year-over-year. Furthermore, as we can see below, this area is relatively undervalued:
Image Source : Jacques Investment Research
Within this region, Jacques Bank – Southwest Industry Group currently ranks in the top 19% out of over 250 industries. Because it is ranked in the top half of all Zacks ranked industries, we expect this group to outperform over the next 3 to 6 months. The industry group has performed admirably this year (+0.17%), a big win relative to the S&P’s -13.6% return. Like the sector, this industry is also undervalued:
Image Source : Jacques Investment Research
Quantitative research studies have shown that nearly half of the increase in a stock’s price can be attributed to its industry group. By focusing on the stocks of the top industries, we can dramatically improve our chances of success. Let’s take a look at a major stock contained within this top industry and sector combination.
BankFirst Corporation (BANF Quick QuoteBANF – Free Report)
BankFirst Corporation is a bank holding company that provides a wide range of commercial banking services to small and medium-sized businesses as well as retail customers. BANF offers checking and savings accounts, sweep accounts, IRAs and CDs. The company also provides lending services for various industries such as real estate, energy and insurance. BANF operates through 108 banking locations in Oklahoma and 3 locations in Texas. BancFirst Corporation was incorporated in 1984 and is headquartered in Oklahoma City, OK.
BANF has outperformed earnings estimates in three of the last four quarters. The holding company recently reported first-quarter EPS of $1.08 in April, which is 16.13% higher than the $0.93 consensus estimate. BANF has delivered a four-quarter average earnings surprise of 12.98%, backing the stock’s 42% return over the past year.
BankFirst Corporation Prices, Consensus and EPS Surprise
Analysts have agreed in terms of earnings estimates and raised them across the board. The one quarter that really stood out this year is the third quarter, where the EPS projected growth of 22.22% in the last 60 days. The Jax consensus estimate is now at $1.21, representing an increase of 4.31% relative to the same quarter last year.
If you’re looking for a financial stock that is outperforming the market, look no further.
