As interest rates begin the long climb up from near-record lows, banks are starting to shine again. When looking for the best stocks to buy and watch, focus on those with rising relative price strength. Home BancShares (HOMB) fits that bill. Its Relative Strength (RS) Rating climbed to 81 Thursday, up from 78.
The 81 RS Rating means that small-cap regional Home BancShares is outperforming 81% of all stocks. Also, the jump puts the bank into an elite group. Market research shows that the stocks that go on to make the biggest gains tend to have an 80 or higher RS Rating in the early stages of their moves.
Home BancShares Holds Strong Composite Rating
Additionally, Conway, Ark.-based Home BancShares carries a 92 Composite Rating. IBD’s Composite Rating combines five separate proprietary ratings of fundamental and technical performance into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
And its A- Accumulation/Distribution Rating, on an A+ to E scale, indicates relatively heavy buying by institutional investors. Its relative strength line, which compares a stock’s performance vs. the S&P 500, has risen steadily for the past year, although it’s not near a record yet.
However, its stock price is rising toward its all-time closing intraday high of 29.69, set in March 2017. Home BancShares was trading at 26.09 Thursday afternoon, up 0.4% for the day.
In terms of fundamentals, earnings grew 14% last quarter, to 50 cents a share. The company has seen accelerating profit growth over the past year. However, revenue in its most recent quarter dipped 2% to $199.4 million. One yellow flag: Its revenue has declined by single digits, on a year-over-year basis the past four quarters.
Other Top Performing Regional Banks
Home BancShares is now considered extended and out of buy range after clearing a 20.58 buy point in a first-stage flat base. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week moving average.
As you try to find the top-rated stocks to add to your watchlist, keep a close on eye on relative price strength.
This exclusive rating from Investor’s Business Daily identifies share price movement with a 1 (worst) to 99 (best) score. The grade shows how a stock’s price movement over the last 52 weeks compares to all the other stocks in our database.
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