Trade Radar | Your Choice: "Laugh at The Bank" or "Laughing to The Bank"?
Another Weekly Session with Loui, M+ Online Head of Research.
Big Banks are beating consensus. Over the course of the past 5 trading days, big banks have been announcing decent and better-than-expected results.
Based on Bloomberg, $JPMorgan Chase & Co. JPM$ and $M&T Bank Corporation MTB$ have surpassed the estimates by 7.8% and 10.3%, respectively for the revenue, while the earnings surprised the consensus by 24.1% and 26.7%, respectively.
Short recap on the recent banking crisis. We believe analysts have been putting in more conservative estimates at this juncture after the banking crisis since the bank-run in some of the banks namely (i) Silicon Valley Bank, (ii) Silvergate Bank, and (iii) Signature Bank and others.
Most of the banks were having significant exposure to the cryptocurrency and the contagion has spread to First Republic Bank. Moreover, Credit Suisse has taken a fall and UBS stepped in to buy the bank.
Time to scoop up some financial stocks? We think the overly conservative estimates will be a decent opportunity for the traders or investors to buy ahead of the reporting season starting last week.
The banking industry should be able to strive through. Since the big banks are able to outperform and continue to grow their assets and earnings, we expect the banking industry may strive through this round of earnings season.
Systematic criteria to identify decent opportunities, we will go through a set of filters:
1) Above market capitalization of USD2bn - to mitigate smaller banks
2) Share price at least hovering above SMA200 (simple moving average 200-day)
From this filter, we are able to get a list of 4 companies for near-term trades.
You may trade them via the M+ Global App.
| Stock | 3 Mon Chg(%) | Last Price (US$) | Market Cap (US$ 'bn) | Expected Report Date |
| $BancFirst Corporation BANF$ | 25.11% | 102.03 | 3.36 | 21st July |
| $Bank OZK - Common Stock OZK$ | 20.50% | 44.67 | 5.12 | 20th July |
| $Texas Capital Bancshares, Inc. TCBI$ | 20.45% | 61.44 | 2.94 | 20th July |
| $First Financial Bancorp. FFBC$ | 16.32% | 24.02 | 2.29 | 20th July |
More about Loui:
Loui Low leads a team of analysts to perform equity and economic research and to provide investment advisory services to the organization's sales team, fund manager and retail fraternity. He has more than 10 years of experience in the stockbroking industry.
He graduated with a Bachelor of Science in Statistics from University of Malaya. He also holds an STA Diploma and is a member of the Society of Technical Analysts (MSTA) United Kingdom.
More about the Trade Radar:
Trade Radar is a weekly-updated section, featuring Loui's latest insights into market trends and hot topics. Traders may find some trading inspiration from Loui's views.
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