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Is it Wise to Hold on to Hancock Holdings (HBHC) Stock?
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Shares of Hancock Holding Company gained 83.3% in the last one year, comfortably outperforming the 40% growth for the Zacks categorized Southeast Bank industry.
The company’s efforts toward improving revenues and controlling costs position it well for future growth. However, it is hard to get too excited about this stock given its margin pressure and significant exposure to risky loan portfolios.
Notably, the company witnessed four upward and one downward revisions in earnings estimates for the current quarter over the last 60 days, while there were three upward and two downward revisions for the current year estimates. This mixed trend is the reason the stock carries just a Zacks Rank #3 (Hold).
Looking at the fundamentals, Hancock Holdings remains focused on its organic growth strategy. The company’s revenues grew at a three year (2014–2016) CAGR of 2.3%. Also, the company has been making several strategic investments, which are expected to further support revenue growth.
Hancock Holdings has been streamlining its business in an effort to reduce expenses and improve efficiency. Though the company believes that the recent First NBC acquisition will lead to higher expenses in second-quarter 2017, it is still targeting further improvement in operating efficiency through additional review of office areas and branch network.
Nonetheless, continued pressure on margins remains a major concern for Hancock Holding. We do not expect a major improvement in the near term unless there is a significant change in the prevailing interest rate environment and impressive loan growth, outside of energy.
Further, Hancock Holdings has significant exposure to residential mortgage, construction and land development as well as commercial real estate loans. Although the housing sector has been improving gradually, any future deterioration in the real estate prices will pose a risk for the company.
Stocks Worth a Look
Some better-ranked stocks in the same space worth considering are Synovus Financial Corp. (SNV - Free Report) , Carolina Financial Corporation and Farmers Capital Bank Corporation .
Synovus Financial witnessed an upward earnings estimate revision of 8% for the current year, in the last 60 days. Its share price increased 9.4%, in the last six months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carolina carries a Zacks Rank #2 (Buy). It witnessed an upward earnings estimate revision of 2.3% for the current year, in the last 60 days. In the last six months, its share price is up 20.9%.
Farmers Capital also carries a Zacks Rank #2. For the current year, in the last 60 days, its Zacks Consensus Estimate has been revised 2.9% upward. Its share price increased 23.8% in the last six months.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Is it Wise to Hold on to Hancock Holdings (HBHC) Stock?
Shares of Hancock Holding Company gained 83.3% in the last one year, comfortably outperforming the 40% growth for the Zacks categorized Southeast Bank industry.
The company’s efforts toward improving revenues and controlling costs position it well for future growth. However, it is hard to get too excited about this stock given its margin pressure and significant exposure to risky loan portfolios.
Notably, the company witnessed four upward and one downward revisions in earnings estimates for the current quarter over the last 60 days, while there were three upward and two downward revisions for the current year estimates. This mixed trend is the reason the stock carries just a Zacks Rank #3 (Hold).
Looking at the fundamentals, Hancock Holdings remains focused on its organic growth strategy. The company’s revenues grew at a three year (2014–2016) CAGR of 2.3%. Also, the company has been making several strategic investments, which are expected to further support revenue growth.
Hancock Holdings has been streamlining its business in an effort to reduce expenses and improve efficiency. Though the company believes that the recent First NBC acquisition will lead to higher expenses in second-quarter 2017, it is still targeting further improvement in operating efficiency through additional review of office areas and branch network.
Nonetheless, continued pressure on margins remains a major concern for Hancock Holding. We do not expect a major improvement in the near term unless there is a significant change in the prevailing interest rate environment and impressive loan growth, outside of energy.
Further, Hancock Holdings has significant exposure to residential mortgage, construction and land development as well as commercial real estate loans. Although the housing sector has been improving gradually, any future deterioration in the real estate prices will pose a risk for the company.
Stocks Worth a Look
Some better-ranked stocks in the same space worth considering are Synovus Financial Corp. (SNV - Free Report) , Carolina Financial Corporation and Farmers Capital Bank Corporation .
Synovus Financial witnessed an upward earnings estimate revision of 8% for the current year, in the last 60 days. Its share price increased 9.4%, in the last six months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carolina carries a Zacks Rank #2 (Buy). It witnessed an upward earnings estimate revision of 2.3% for the current year, in the last 60 days. In the last six months, its share price is up 20.9%.
Farmers Capital also carries a Zacks Rank #2. For the current year, in the last 60 days, its Zacks Consensus Estimate has been revised 2.9% upward. Its share price increased 23.8% in the last six months.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>