The stock market has faced a massive sell-off lately on concerns over soaring inflation and rising interest rates. The S&P 500 plunged 19.8% year-to-date. Amid this backdrop, it could be wise to invest in stocks that have gained momentum, as their momentum might continue for some time irrespective of the external forces.
Earlier this month, the Federal Reserve hiked interest rates by 75 basis points and indicated further aggressive monetary tightening to bring the prices down. Many analysts expect the Fed’s rate hikes to eventually result in a recession, leading to further downside for most stocks.
Quality stocks Bank7 Corp. (BSVN), Consolidated Water Co. Ltd. (CWCO), Luther Burbank Corporation (LBC), Orrstown Financial Services, Inc. (ORRF), and Summit Financial Group, Inc. (SMMF) have shown a decent momentum lately. So, investing in these stocks could help capitalize on their continued momentum amid the market’s downtrend.
Bank7 Corp. (BSVN)
BSVN provides banking and financial services to individual and corporate customers in Oklahoma, Kansas, and Texas. It also offers commercial real estate, hospitality, energy, commercial and industrial lending services, consumer lending services, and commercial and retail deposit services.
On December 10, 2021, BSVN acquired Watonga Bancshares, Inc., the bank holding company of Cornerstone Bank. This acquisition adds core funding to the company’s existing deposit base and expands its scale within Oklahoma City.
BSVN’s total interest income increased 13.2% year-over-year to $14.93 million for the first quarter ended March 31, 2022. The company’s net income grew 21.2% year-over-year to $6.18 million, while its EPS came in at $0.68, up 21.5% from its year-ago value.
Analysts expect BSVN’s EPS for the fiscal fourth quarter (ending December 2022) to increase 22% year-over-year to $0.83. Its revenue for the quarter ending September 30, 2022, is expected to increase 22% year-over-year to $16.90 million. It surpassed the consensus EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 32.6% over the past year and 7.6% over the past nine months to close the last trading session at $22.75.
BSVN’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has a B grade for Momentum, Stability, and Sentiment. Within the Southwest Regional Banks industry, it is ranked #4 out of 28 stocks. Click here to see the other ratings of BSVN for Growth, Value, and Quality.
Consolidated Water Co. Ltd. (CWCO)
Headquartered in the Cayman Islands, CWCO develops and operates water supply, treatment plants, and water distribution systems in the Cayman Islands, the Bahamas, and the United States. The company operates through four segments: Retail, Bulk, Services, and Manufacturing.
On May 17, 2022, CWCO’s subsidiary PERC Water Corporation contracted an agreement to construct and commission a four million gallon per day wastewater treatment plant in Arizona. This reflects the company’s demand for services within the market. “We are very appreciative and honored that Liberty has selected us for this project,” said PERC’s president, Nate Owen.
For the fiscal first quarter ended March 31, 2022, CWCO’s total revenues increased 14.4% year-over-year to $19.56 million. Its income from operations grew 105.9% from its year-ago value to $2.29 million, while its net income improved 73.6% from its prior-year quarter to $1.71 million. The company’s EPS came in at $0.11, up 83.3% year-over-year.
For the current year ending December 31, 2022, CWCO’s EPS is expected to increase 1,016.7% year-over-year to $0.67. Its revenue for the quarter ending September 30, 2022, is expected to increase 25.5% year-over-year to $20.60 million.
The stock has gained 31.7% year-to-date, 27.7% over the past six months, and 30.7% over the past three months to close the last trading session at $14.01.
CWCO’s POWR Ratings reflect solid prospects. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Sentiment and a B grade for Growth and Momentum. It is ranked first out of 13 stocks in the Water industry. To see the other ratings of CWCO for Value, Stability, and Quality, click here.
Luther Burbank Corporation (LBC)
LBC functions as the bank holding company for Luther Burbank Savings, offering various banking products and services for real estate investors, professionals, entrepreneurs, depositors, and commercial businesses.
LBC’s net interest income increased 16.3% year-over-year to $45.03 million for the first quarter ended March 31, 2022. The company’s net income increased 24.6% year-over-year to $22.94 million. Also, its EPS came in at $0.45, representing an increase of 28.6% year-over-year.
Analysts expect LBC’s revenue for the quarter ending June 30, 2022, to increase 12.3% year-over-year to $44.88 million. The Street expects its EPS to increase at 7% per annum over the next five years. The company surpassed the consensus EPS estimates in each of the trailing four quarters, which is excellent.
Over the past year, the stock has gained 10.8% to close the last trading session at $13.12.
LBC’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, equating to Buy in our proprietary rating system.
It has an A grade for Stability and a B for Momentum and Sentiment. It is ranked #5 out of 42 stocks in the Pacific Regional Banks industry. Click here to see the other ratings of LBC for Growth, Value, and Quality.
Orrstown Financial Services, Inc. (ORRF)
ORRF operates as the holding company for Orrstown Bank, which offers commercial banking and financial advisory services in the United States. The company accepts various deposits, including checking, savings, time, demand, and money market deposits. It also offers commercial real estate, equipment, construction, working capital, residential mortgage, and consumer loans.
For the fiscal first quarter ended March 31, 2022, ORRF’s net interest income increased 3.3% year-over-year to $22.57 million. Its net income increased 24.7% sequentially to $8.36 million. Also, its EPS came in at $0.76, representing an increase of 26.6% sequentially.
For the third quarter ending September 2022, ORRF’s revenue is expected to increase 7.3% year-over-year to $22.14 million. Its EPS for the quarter ending December 31, 2022, is expected to increase 2.5% year-over-year to $0.62. It surpassed the consensus EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 4.1% over the past three months and 202% over the past nine months to close the last trading session at $24.17.
ORRF’s POWR Ratings reflect solid prospects. The stock has an overall B rating, equating to Buy in our proprietary rating system.
It has an A grade for Stability and a B grade for Value, Momentum, and Sentiment. Within the Northeast Regional Banks industry, it is ranked #7 out of 63 stocks. Click here to see the other ratings of ORRF for Growth and Quality.
Summit Financial Group, Inc. (SMMF)
SMMF offers community banking services, including demand, savings, and time deposits; commercial, real estate, and consumer loans; trust and wealth management services; and cash management services to individuals and businesses.
SMMF’s net interest income increased 12.6% year-over-year to $29.55 million in the fiscal first quarter (ended March 31, 2022). Its net income grew 12.9% from the year-ago value to $11.69 million, while its EPS increased 12.5% from the prior-year quarter to $0.90.
The consensus EPS estimate of $0.96 represents a 14.9% improvement year-over-year for the second quarter (ending June 2022). Analysts expect SMMF’s revenue to increase 5.4% year-over-year to $34.37 million for the quarter ending September 30, 2022. In addition, the company has an excellent earnings surprise history, as it surpassed the consensus EPS estimates in each of the trailing four quarters.
Shares of SMMF have gained 22.6% over the past year, 10.9% over the past nine months, and 5.3% over the past three months to close the last trading session at $27.51.
SMMF has an overall B rating, which translates to Buy in our proprietary rating system. It has an A grade for Stability and a B grade for Growth, Value, Momentum, and Sentiment. Also, it is ranked first out of 36 stocks in the Mid-Atlantic Regional Banks industry.
In addition to the POWR Ratings grades I’ve just highlighted, you can see the SMMF rating for Quality here.
BSVN shares were trading at $22.75 per share on Thursday afternoon, down $0.00 (0.00%). Year-to-date, BSVN has declined -0.08%, versus a -19.53% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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