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Think Small When it Comes to Banks
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Industry Rank Analysis 11-2-11
The last few years have sure been rough for the banking industry, and the big banks still face a host of problems, ranging from downright criminal incompetence in handling foreclosures (the "robo-signing" scandal) to exposure to the mess in Europe.
On the other hand, the federal government has bent over backwards to be nice to the industry. Bailout funds were provided on extremely favorable terms. The Fed has kept short-term rates pegged at near zero for almost three years now, and has promised to keep them there until at least the middle of 2013.
On the other hand, your local bank with four or five branches is a very different animal than a Citigroup (C - Analyst Report) or a Bank of America (BAC - Analyst Report). For starters, if the local banks screw up, they go out of business. So far this year 85 of them have, and I would expect to see at least one or two fail each week between now and the end of the year.
As the economy has gradually improved, and the bad loans made during the worst of the bubble roll off, the condition of the banks' balance sheets has improved. Consumer delinquencies, while still high, have been falling, and time has been working its magic in healing the wounds.
Some of the reserves that banks had set aside for bad loans now seem excessive, and those reserves are being released, and less new money has been put aside. Deposit rates near zero have made the loans that the banks have been making recently very profitable.
As a result, many small banks -- which don’t face many of the problems of the big guys -- have been showing surprisingly positive earnings. And now they are showing up very positively on the Zacks Rank.
Zacks Industry Classifications
The Zacks industry classifications are very fine, with 258 different industries tracked. It is not particularly noteworthy if a single small industry shows up doing well -- a single firm with good news can propel a one or two firm industry to the top (or bottom) of the charts.
It is interesting when you see a cluster of similar industries at the top of the list. The same holds true for the bottom of the list. The definition of size that matters here is not the total sales or market capitalization but the number of companies in the “industry.”
Banks Separated by Size and Region
We break up the overall bank sector into five regional groupings, plus a “multi-regional” group that is mostly the too big to fail (TBTF) firms. We also have a separate “industry” for the foreign banks.
The five regional groupings are all showing up as attractive on the Zacks Industry Rank. The domestic TBTF groups is decidedly in the middle of the pack, and the foreign “industry” looks downright awful on the Zacks Rank.
All of the regional groupings are bigger than average by number of firms, and most are among the very biggest industries (by number of firms). Given the law of large numbers, it is very hard for a huge industry to find itself at the very top, or the very bottom of the industry list. If a big industry gets close to either end, it is worth paying attention.
The Midwest region “industry” is the strongest of the bunch, coming in 12th place with an average Zacks rank of 2.44, down from 2.47 last week and a two spot improvement. The Midwest group has 36 firms in it. Normally industries in the top 15 have fewer than ten firms in them, and often much lower than that.
The West banking “industry” was the next best, in 23rd place, a six-spot improvement as its average rank fell to 2.53 from 2.60. The West “industry” has 40 stocks in it. The Southwest “industry” is by far the smallest of the bunch, but with 12 firms in it is still substantially bigger than the median-sized industry. It was just behind the West in 27th place with an average rank of 2.58, but that marks a very big 34 spot improvement as the average rank fell from 2.75 last week.
The final two groups are the biggest of all: the Southeast has 78 members and the Northeast has 58. Their rank is not that impressive in absolute terms, coming in at 51 and 58 respectively, but they are very large, and they fit in with the overall theme. The Southeast improved nine spots on the week as its average rank fell to 2.71 from 2.79. The Northeast “industry” improved by nine spots, as its average rank fell to 2.74 from 2.76.
If the Zacks Ranks were distributed randomly, one would expect that only 5% of the members of these “industries” would earn the coveted Zacks #1 Rank (Strong Buy). Instead, 17 of the total of 224 (7.6%) have earned that distinction. If it were random, only 15% would hold Zacks #2 Ranks (Buy) but actually 73, or 32.6%, hold it. In other words, there are attractively ranked small banks in every area of the country.
A Cornucopia of Lesser-Known Names
You have probably never heard of most of these banks. Some of them you might recognize if they happen to operate in your town, but it is a fair bet that the names of most of them have never, or at least very rarely been uttered on CNBC. That, however, does not mean that they cannot be good investments.
This is a group that cries out for a “package approach.” None of the banks on either of the lists are large-caps, and even the mid-caps are on the small side of the mid-cap range. In fact, taking the two lists together, sub-$100 million micro-caps outnumber firms with market caps over $1 billion by 30 to nine.
You can create a “synthetic” national bank that avoids the regional risk that these banks pose by having a portfolio made up of small positions in many of these names, rather than just taking one normal-sized position. Given the thin trading volumes in these names, even an individual investor could impact the price if they tried to take a big potion in just one of these names.
The valuations are for the most part reasonable, and while I don’t show the FY2 over FY1 growth on the tables, you can get a good idea of it by looking at how much lower the P/E for next year is relative to the P/E for this year. Most are expecting solid, but not spectacular growth, and you are paying a reasonable price for those earnings. Not rock bottom for the most part, but very reasonable.
Unlike the big guys, most of these firms are free to pay what ever dividends their boards deem appropriate (the TBTF ones need to ask permission from the Fed, and the Fed has not been inclined to say yes for most of them, and should not for quite some time to come). Many of these small-fry banks provide very attractive dividend yields.
Most are seeing big increases in their estimates for both this year and next. However, just as a word of warning, they tend to be thinly covered, so an individual analyst raising his or her numbers for the firm has a much bigger impact on the mean estimate than is the case with the big well-covered banks. Still, higher earnings will allow these banks to pay higher dividends in the future, so if you do buy them and tuck them away, there is a very good chance that your yield on cost will be much higher a few years down the road than is indicated on the tables below.
The Zacks Rank is, however, better used as a short-term timing/trading tool, not as a guide towards long-term investing. Still, even the longest-term investor wants to avoid an immediate drop after he buys, and will enjoy a pop shortly after she puts the order in. The combination of an attractive Zacks Rank, and a low or at least moderate valuation is what you want to look for.
If you want a bank for your portfolio, think small. A package of, say, Chemical Financial (CHFC - Snapshot Report), Community Trust (CTBI - Snapshot Report), People's Bank of Ohio (PEBO - Snapshot Report), American National Bankshares (AMNB - Snapshot Report) and Vist Financial (VIST - Snapshot Report) probably has just as much upside potential, and a lot less risk, than a single position in Citigroup. You will also enjoy a much nicer dividend stream along the way. Right now, when it comes to the banks, small is beautiful.
Number 1 Ranked Firms
The last few years have sure been rough for the banking industry, and the big banks still face a host of problems, ranging from downright criminal incompetence in handling foreclosures (the "robo-signing" scandal) to exposure to the mess in Europe.
On the other hand, the federal government has bent over backwards to be nice to the industry. Bailout funds were provided on extremely favorable terms. The Fed has kept short-term rates pegged at near zero for almost three years now, and has promised to keep them there until at least the middle of 2013.
On the other hand, your local bank with four or five branches is a very different animal than a Citigroup (C - Analyst Report) or a Bank of America (BAC - Analyst Report). For starters, if the local banks screw up, they go out of business. So far this year 85 of them have, and I would expect to see at least one or two fail each week between now and the end of the year.
As the economy has gradually improved, and the bad loans made during the worst of the bubble roll off, the condition of the banks' balance sheets has improved. Consumer delinquencies, while still high, have been falling, and time has been working its magic in healing the wounds.
Some of the reserves that banks had set aside for bad loans now seem excessive, and those reserves are being released, and less new money has been put aside. Deposit rates near zero have made the loans that the banks have been making recently very profitable.
As a result, many small banks -- which don’t face many of the problems of the big guys -- have been showing surprisingly positive earnings. And now they are showing up very positively on the Zacks Rank.
Zacks Industry Classifications
The Zacks industry classifications are very fine, with 258 different industries tracked. It is not particularly noteworthy if a single small industry shows up doing well -- a single firm with good news can propel a one or two firm industry to the top (or bottom) of the charts.
It is interesting when you see a cluster of similar industries at the top of the list. The same holds true for the bottom of the list. The definition of size that matters here is not the total sales or market capitalization but the number of companies in the “industry.”
Banks Separated by Size and Region
We break up the overall bank sector into five regional groupings, plus a “multi-regional” group that is mostly the too big to fail (TBTF) firms. We also have a separate “industry” for the foreign banks.
The five regional groupings are all showing up as attractive on the Zacks Industry Rank. The domestic TBTF groups is decidedly in the middle of the pack, and the foreign “industry” looks downright awful on the Zacks Rank.
All of the regional groupings are bigger than average by number of firms, and most are among the very biggest industries (by number of firms). Given the law of large numbers, it is very hard for a huge industry to find itself at the very top, or the very bottom of the industry list. If a big industry gets close to either end, it is worth paying attention.
The Midwest region “industry” is the strongest of the bunch, coming in 12th place with an average Zacks rank of 2.44, down from 2.47 last week and a two spot improvement. The Midwest group has 36 firms in it. Normally industries in the top 15 have fewer than ten firms in them, and often much lower than that.
The West banking “industry” was the next best, in 23rd place, a six-spot improvement as its average rank fell to 2.53 from 2.60. The West “industry” has 40 stocks in it. The Southwest “industry” is by far the smallest of the bunch, but with 12 firms in it is still substantially bigger than the median-sized industry. It was just behind the West in 27th place with an average rank of 2.58, but that marks a very big 34 spot improvement as the average rank fell from 2.75 last week.
The final two groups are the biggest of all: the Southeast has 78 members and the Northeast has 58. Their rank is not that impressive in absolute terms, coming in at 51 and 58 respectively, but they are very large, and they fit in with the overall theme. The Southeast improved nine spots on the week as its average rank fell to 2.71 from 2.79. The Northeast “industry” improved by nine spots, as its average rank fell to 2.74 from 2.76.
If the Zacks Ranks were distributed randomly, one would expect that only 5% of the members of these “industries” would earn the coveted Zacks #1 Rank (Strong Buy). Instead, 17 of the total of 224 (7.6%) have earned that distinction. If it were random, only 15% would hold Zacks #2 Ranks (Buy) but actually 73, or 32.6%, hold it. In other words, there are attractively ranked small banks in every area of the country.
A Cornucopia of Lesser-Known Names
You have probably never heard of most of these banks. Some of them you might recognize if they happen to operate in your town, but it is a fair bet that the names of most of them have never, or at least very rarely been uttered on CNBC. That, however, does not mean that they cannot be good investments.
This is a group that cries out for a “package approach.” None of the banks on either of the lists are large-caps, and even the mid-caps are on the small side of the mid-cap range. In fact, taking the two lists together, sub-$100 million micro-caps outnumber firms with market caps over $1 billion by 30 to nine.
You can create a “synthetic” national bank that avoids the regional risk that these banks pose by having a portfolio made up of small positions in many of these names, rather than just taking one normal-sized position. Given the thin trading volumes in these names, even an individual investor could impact the price if they tried to take a big potion in just one of these names.
The valuations are for the most part reasonable, and while I don’t show the FY2 over FY1 growth on the tables, you can get a good idea of it by looking at how much lower the P/E for next year is relative to the P/E for this year. Most are expecting solid, but not spectacular growth, and you are paying a reasonable price for those earnings. Not rock bottom for the most part, but very reasonable.
Unlike the big guys, most of these firms are free to pay what ever dividends their boards deem appropriate (the TBTF ones need to ask permission from the Fed, and the Fed has not been inclined to say yes for most of them, and should not for quite some time to come). Many of these small-fry banks provide very attractive dividend yields.
Most are seeing big increases in their estimates for both this year and next. However, just as a word of warning, they tend to be thinly covered, so an individual analyst raising his or her numbers for the firm has a much bigger impact on the mean estimate than is the case with the big well-covered banks. Still, higher earnings will allow these banks to pay higher dividends in the future, so if you do buy them and tuck them away, there is a very good chance that your yield on cost will be much higher a few years down the road than is indicated on the tables below.
The Zacks Rank is, however, better used as a short-term timing/trading tool, not as a guide towards long-term investing. Still, even the longest-term investor wants to avoid an immediate drop after he buys, and will enjoy a pop shortly after she puts the order in. The combination of an attractive Zacks Rank, and a low or at least moderate valuation is what you want to look for.
If you want a bank for your portfolio, think small. A package of, say, Chemical Financial (CHFC - Snapshot Report), Community Trust (CTBI - Snapshot Report), People's Bank of Ohio (PEBO - Snapshot Report), American National Bankshares (AMNB - Snapshot Report) and Vist Financial (VIST - Snapshot Report) probably has just as much upside potential, and a lot less risk, than a single position in Citigroup. You will also enjoy a much nicer dividend stream along the way. Right now, when it comes to the banks, small is beautiful.
Number 1 Ranked Firms
| Company | Ticker | Market Cap ($ mil) | P/E Using Curr FY Est | P/E Using Next FY Est | "%Ch Curr Fiscal Yr Est - 4 wks " | "%Ch Next Fiscal Yr Est - 4 wks " | "Current Price " | Div Yield |
| Chemical Finl | CHFC | $495 | 12.53 | 11.33 | 6.14% | 3.91% | $18.05 | 4.43% |
| First Finl-Ind | THFF | $425 | 12.62 | 13.19 | 6.89% | 1.03% | $32.31 | 2.91% |
| Commun Trust Bc | CTBI | $409 | 11.15 | 10.76 | 2.36% | 2.92% | $26.57 | 4.59% |
| Enterprise Finl | EFSC | $240 | 8.91 | 8.83 | 11.67% | 7.90% | $13.86 | 1.52% |
| Center Bancorp | CNBC | $159 | 12.77 | 11.7 | 6.99% | 3.09% | $9.77 | 1.23% |
| Midwestone Finl | MOFG | $128 | 11.69 | 10.73 | 16.51% | 17.23% | $14.84 | 1.35% |
| Peopl Bncp-Ohio | PEBO | $124 | 13.96 | 10.91 | 26.32% | 13.16% | $11.73 | 3.41% |
| Amer Natl Bnksh | AMNB | $117 | 14.18 | 11.28 | 3.46% | 6.62% | $19.07 | 4.82% |
| Horizon Bncp-In | HBNC | $92 | 8.79 | 8.57 | 7.10% | 3.89% | $27.50 | 2.47% |
| Access Natl Cp | ANCX | $90 | 9.55 | 9.77 | 12.27% | 14.74% | $8.74 | 1.83% |
| Metrocorp Bancs | MCBI | $82 | 22.93 | 13.76 | 0.00% | 0.00% | $6.19 | 0.00% |
| Mercantile Bank | MBWM | $82 | 11.69 | 10.8 | 54.03% | 15.03% | $9.50 | 0.00% |
| Monarch Financl | MNRK | $46 | 12.05 | 10.36 | -1.53% | 2.04% | $7.77 | 2.06% |
| Vist Financial | VIST | $41 | 14.25 | 7.74 | 12.82% | -29.57% | $6.27 | 3.19% |
| Tower Financial | TOFC | $41 | 10.61 | 10.23 | 6.67% | -2.35% | $8.49 | 0.00% |
| First M & F Crp | FMFC | $34 | 20.72 | 5.49 | -10.00% | 0.00% | $3.73 | 1.07% |
| Preferred Bank | PFBC | $20 | 19.14 | 11.87 | 200.00% | 54.80% | $7.66 | 0.00% |
Number 2 Ranked Stocks
| Company | Ticker | Market Cap ($ mil) | P/E Using Curr FY Est | P/E Using Next FY Est | "%Ch Curr Fiscal Yr Est - 4 wks " | "%Ch Next Fiscal Yr Est - 4 wks " | "Current Price " | Div Yield |
| Regions Finl Cp | RF | $6,408 | 32.23 | 8.56 | 61.08% | -1.77% | $5.10 | 0.78% |
| Bok Finl Corp | BOKF | $3,389 | 12.39 | 11.68 | 1.90% | -0.05% | $49.52 | 2.22% |
| East West Bc | EWBC | $2,582 | 11.19 | 9.63 | 2.53% | 1.19% | $17.36 | 1.15% |
| Assoc Banc Corp | ASBC | $2,166 | 19.01 | 12.2 | 17.59% | 4.02% | $12.50 | 0.32% |
| Webster Finl Cp | WBS | $1,599 | 12.11 | 11.29 | 7.16% | 7.68% | $18.27 | 1.09% |
| Hancock Hldg Co | HBHC | $1,357 | 15.68 | 11.9 | 19.77% | 4.43% | $30.91 | 3.11% |
| Umpqua Hldgs Cp | UMPQ | $1,262 | 18.35 | 13.58 | 8.11% | 6.57% | $11.01 | 1.82% |
| Synovus Finl Cp | SNV | $1,186 | N/A | 9.66 | -6.67% | -9.41% | $1.51 | 2.65% |
| Natl Penn Bcshs | NPBC | $1,108 | 14.45 | 11.93 | 10.00% | 3.20% | $7.31 | 1.64% |
| Texas Cap Bcshs | TCBI | $960 | 14.99 | 12.31 | 15.73% | 12.43% | $25.78 | 0.00% |
| First Fin Bk-Tx | FFIN | $957 | 14.41 | 13.76 | 2.11% | 1.19% | $30.44 | 3.15% |
| Cvb Finl | CVBF | $950 | 12.7 | 11.56 | 14.53% | 3.97% | $8.96 | 3.79% |
| Susquehanna Bsh | SUSQ | $884 | 17.73 | 9.9 | -2.89% | -0.64% | $6.80 | 1.18% |
| Bank Ozarks | OZRK | $871 | 9.32 | 14.39 | 66.71% | 2.20% | $50.96 | 1.49% |
| Privatebancorp | PVTB | $740 | 29.52 | 12.85 | -14.98% | -19.02% | $10.31 | 0.39% |
| Columbia Bk Sys | COLB | $646 | 19.67 | 16.96 | 13.66% | 10.60% | $16.37 | 1.22% |
| Pacwest Bancorp | PACW | $642 | 13.9 | 12.86 | 14.82% | 2.87% | $18.10 | 0.22% |
| Western Allianc | WAL | $555 | 28.6 | 11.64 | 4.89% | 2.40% | $6.75 | 0.00% |
| Wesbanco Inc | WSBC | $519 | 11.6 | 10.29 | 8.61% | 7.87% | $19.51 | 3.08% |
| Boston Priv Fin | BPFH | $497 | 16.91 | 11.39 | 130.17% | 8.37% | $6.45 | 0.62% |
| Pinnacle Fin Pt | PNFP | $473 | 26.23 | 18.44 | -3.13% | 4.93% | $13.87 | 0.00% |
| Hudson Vly Hldg | HVB | $375 | 14.07 | 11.31 | 25.42% | 14.64% | $21.18 | 2.83% |
| Lakeland Finl | LKFN | $370 | 12.45 | 10.83 | 4.41% | 2.43% | $22.85 | 2.71% |
| Trustco Bk -Ny | TRST | $346 | 11.76 | 10.16 | N/A | N/A | $4.47 | 5.87% |
| Citizens Bkng | CRBC | $321 | N/A | 6 | 16.90% | 19.78% | $8.08 | 0.00% |
| Cardinal Finl | CFNL | $306 | 13.71 | 11.85 | 2.64% | 1.39% | $10.57 | 1.14% |
| Bancorp Bnk/The | TBBK | $292 | 30.08 | 13.8 | -37.77% | -19.05% | $8.80 | 0.00% |
| Sterling Bancrp | STL | $286 | 17.91 | 12.06 | -6.18% | -2.05% | $9.24 | 3.90% |
| Stellarone Corp | STEL | $284 | 22.14 | 15.97 | 7.73% | 4.57% | $12.34 | 1.30% |
| Nara Bcp Inc | NARA | $283 | 12.72 | 9.07 | 3.02% | -0.35% | $7.45 | 0.00% |
| Provident Ny Bp | PBNY | $272 | 17.63 | 17.42 | -10.00% | -7.87% | $7.14 | 3.36% |
| Arrow Finl Corp | AROW | $271 | 13.21 | 13.21 | -1.64% | -2.17% | $23.77 | 4.21% |
| Sun Bancorp/Nj | SNBC | $264 | N/A | 47.11 | 8.71% | 800.00% | $3.18 | 0.00% |
| Ameris Bancorp | ABCB | $235 | 30.67 | 13.85 | 85.35% | 11.56% | $9.89 | 0.00% |
| Trico Bancshrs | TCBK | $226 | 20.57 | 14.02 | 15.48% | 10.96% | $14.19 | 2.54% |
| Cobiz Finl Inc | COBZ | $217 | 17.93 | 10.86 | 15.93% | 5.64% | $5.85 | 0.68% |
| Natl Bnkshrs Va | NKSH | $177 | 10.58 | 10.37 | 2.34% | 2.50% | $25.50 | 3.76% |
| Capital City Bk | CCBG | $176 | 33.95 | 21.4 | 63.02% | -2.48% | $10.27 | 3.89% |
| 1St Utd Bc/No | FUBC | $176 | 53.24 | 23.96 | -18.18% | -11.11% | $5.75 | 0.00% |
| Pacific Contl | PCBK | $166 | 21.31 | 15.67 | 3.50% | -2.82% | $9.01 | 0.44% |
| Bridge Cap Hldg | BBNK | $158 | 24 | 16.22 | 5.00% | 3.88% | $10.50 | 0.00% |
| Taylor Cap Grp | TAYC | $154 | N/A | 12.81 | -6.90% | 0.00% | $7.60 | 0.00% |
| Hanmi Finl Cp | HAFC | $145 | 4.8 | 6.86 | 14.29% | 0.00% | $0.96 | 0.00% |
| Seacoast Bkng A | SBCF | $137 | N/A | 31.06 | 15.79% | -7.84% | $1.46 | 0.00% |
| Bridge Bancorp | BDGE | $136 | 13.88 | 12.87 | 4.83% | 3.80% | $21.10 | 4.36% |
| Northrim Bcp | NRIM | $128 | 13.48 | 12.35 | 6.50% | 3.21% | $19.88 | 2.41% |
| Encore Bancshrs | EBTX | $123 | 23.39 | 15.4 | 56.41% | 32.38% | $10.70 | 0.00% |
| Park Sterlng Cp | PSTB | $122 | N/A | N/A | -9.24% | -33.33% | $4.28 | 0.00% |
| Heritage Fin Gp | HBOS | $104 | 476 | 49.58 | 0.00% | 26.32% | $11.90 | 1.01% |
| Middleburg Finl | MBRG | $101 | 21.63 | 17.08 | 0.00% | -0.58% | $14.60 | 1.37% |
| Wilshire Bcp | WIBC | $90 | N/A | 8.68 | 6.54% | -22.34% | $3.05 | 0.00% |
| Southeastn Bank | SBFC | $87 | 9.29 | N/A | 0.00% | N/A | $13.00 | 0.00% |
| Newbridge Banc | NBBC | $74 | 104.44 | 24.74 | 158.70% | -33.72% | $4.70 | 0.00% |
| Guaranty Bancrp | GBNK | $72 | N/A | 33.46 | 32.35% | N/A | $1.34 | 0.00% |
| C&F Finl Cp | CFFI | $72 | 7.65 | N/A | 0.00% | N/A | $22.95 | 4.36% |
| Bank Of Commrc | BOCH | $67 | 12.88 | 10.76 | -7.58% | -2.67% | $3.93 | 3.06% |
| Intervest Bcsh | IBCA | $66 | 7.78 | 6.76 | 53.85% | 64.29% | $3.11 | 0.00% |
| Amer River Bsh | AMRB | $59 | 43.27 | 18.74 | 0.00% | 0.00% | $5.95 | 0.00% |
| Evans Bancorp | EVBN | $57 | 11.35 | 9.89 | -16.44% | -9.09% | $13.85 | 2.89% |
| Shore Bancshrs | SHBI | $54 | N/A | 14.42 | -182.50% | -39.09% | $6.44 | 0.62% |
| Macatawa Bank | MCBC | $53 | 21.57 | 27.45 | 0.00% | 0.00% | $3.02 | 0.00% |
| Republic Fst Bc | FRBK | $52 | N/A | 85.71 | 13.21% | N/A | $2.00 | 0.00% |
| Firstbank Alma | FBMI | $44 | 21.4 | 15.75 | -5.36% | 0.00% | $5.67 | 0.71% |
| Somerset Hills | SOMH | $44 | 16.67 | 13.56 | 2.13% | 3.51% | $8.00 | 3.00% |
| Ecb Bancorp Inc | ECBE | $35 | N/A | 30.75 | 43.64% | 166.67% | $12.30 | 0.00% |
| Yadkin Valy Fin | YAVY | $30 | N/A | N/A | -169.62% | -118.00% | $1.85 | 0.00% |
| Summit State Bk | SSBI | $30 | 14.2 | 13.59 | 22.22% | 12.19% | $6.25 | 5.76% |
| Southn Commnty | SCMF | $27 | N/A | N/A | 55.56% | -161.54% | $1.60 | 0.00% |
| First Commty Cp | FCCO | $20 | 13.3 | 10.42 | 18.99% | 4.35% | $6.25 | 2.56% |
| Tennessee Comrc | TNCC | $18 | N/A | N/A | -168.54% | -1333.33% | $1.44 | 0.00% |
| First Cap Bancp | FCVA | $11 | 10.34 | N/A | 0.00% | N/A | $3.62 | 0.00% |
In evaluating the Zacks Industry Ranks, you want to see two things: a good overall score (low, meaning more Zacks #1 and #2 Ranked stocks than #4 or #5 Ranked stocks) and some improvement the relative position from the prior week. It is also helpful to understand exactly what the Zacks Industry Rank is.
The Zacks Industry Rank is the un-weighted average of the individual Zacks ranks of the firms in that industry. It does not matter if the stock is the 800 lb gorilla that dominates the industry or some very small niche player in the industry -- they have the same influence on the industry rank.
Also, that means that the bigger the industry in terms of number of firms, the less influence any given company has on the industry rank. It also implies that small industries, with just two or three firms, should be the ones found at either the top or the bottom of the list. After all, if there are only two firms in the industry, it is relatively easy to get a Zacks rank of 2.00 (i.e. one with a Zacks Rank of #1 and the other with a #3). Right now, that industry rank would be tied for 6th place among the 255 industries tracked.
The same obviously goes for the bottom of the list as well. If there are 50 firms in the industry, and it ends up at one of the extremes, that means there has to be something pretty significant going on. Thus, I do not always focus on the very highest rated industries, but on the highest rated ones in which there are a large number of firms.
Click here for the Zacks Industry Rank List: http://www.zacks.com/zrank/zrank_inds.php
Read the full analyst report on BAC
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Read the full analyst report on CTBI
Read the full analyst report on C
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