The stock market made a solid comeback in Friday’s trading session, with S&P 500, Dow Jones, and Nasdaq rising more than 3%, 2.7%, and 3.3%, respectively. However, S&P 500 is down around 18% year-to-date and is on its path to its worst first half of any year since 1970. The Fed’s monetary policy tightening to tame the multi-decade high inflation is primarily responsible for the market slump.
Timothy Braude, global head of OCIO at Goldman Sachs Asset Management, said, "We don't expect the choppiness and volatility we've seen over the first half of the year to subside." The Federal Reserve increased interest rates by 0.75 percentage points earlier this month and is expected to raise the rates further in the next couple of months.
However, turning to momentum investing now might be profitable since stocks that have gained momentum in recent months could be able to maintain it in the near term, regardless of short-term market swings.
Fundamentally sound 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 witnessed robust momentum over the past few months, and their solid growth prospects should further allow them to keep soaring in the near term.
Bank7 Corp. (BSVN)
BSVN functions as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers. It offers commercial deposit services, including commercial checking, money market, other deposit accounts; and retail deposit services.
For the first quarter ending March 31, 2022, BSVN’s total interest income increased 13.2% year-over-year to $14.93 million. Its net income grew 21.2% from its year-ago value to $6.18 million, while its EPS improved 21.4% from its prior-year quarter to $0.68. The cash and cash equivalents stood at $126.28 million for the three months ended March 31, 2022.
Analysts expect BSVN's revenue to increase 13% year-over-year to $16.10 million for the second quarter ending June 2022. The consensus EPS estimate of $0.76 represents a 13.4% improvement year-over-year for the second quarter ending June 2022. The stock has gained 38.4% over the past year.
Closing the last trading session at $23.76, the stock is currently trading above its 50-day and 200-day moving averages of $23.73 and $23.64, respectively.
BSVN's POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has an A grade for Momentum and a B for Sentiment and Stability. Within the D-rated Southwest Regional Banks industry, it is ranked #2 of 28 stocks.
To see additional POWR Ratings for Value, Quality, and Growth for BSVN, click here.
Consolidated Water Co. Ltd. (CWCO)
CWCO designs, constructs, manages, and operates water production and treatment plants primarily in the Cayman Islands, the Bahamas, and the United States. The company has four operating segments: Retail; Bulk; Services; and Manufacturing.
Last month, CWCO announced that its subsidiary PERC Water Corporation (PERC) agreed to construct and commission a four million gallon per day wastewater treatment facility for Liberty Utilities Corp., which will be located in Goodyear, Arizona. PERC’s president, Nate Owen, said, “This new facility will help to address the increasing demand in Liberty’s service territory throughout Goodyear, Litchfield Park, Palm Valley, and the 303 corridors as these areas have experienced significant residential and commercial growth over the past decade.
Last month, CWCO signed a conclusive agreement with the Water Authority of the Cayman Islands for its planned seawater reverse osmosis plant in George Town, Grand Cayman. CSCO will design, construct and commission the plant over the next 18 months and then sell the facility to the Authority.
During the first quarter ending March 31, 2022, CWCO’s revenue 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 78.6% from its prior-year quarter to $2.32 million. The company’s EPS rose 83.3% year-over-year to $0.11.
The consensus EPS estimate of $1.69 for the second quarter ending June 2022 represents an 8.1% year-over-year growth. Analysts expect revenue to increase 7.1% year-over-year to $664.53 million for the third quarter ending September 2022. The company’s shares have surged 33.9% year-to-date and 39.8% over the past three months.
Closing the last trading session at $14.25, the stock is currently trading above its 50-day and 200-day moving averages of $12.41 and 11.21, respectively.
CWCO's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Sentiment and Momentum and a B for Growth. Within the F-rated Water industry, it is ranked #1 of 13 stocks.
In total, we rate CWCO on eight different levels. Beyond what we've stated above, we have also given CWCO grades for Stability, Value, and Quality. Get all the CWCO ratings here.
Luther Burbank Corporation (LBC)
LBC functions as the bank holding company for Luther Burbank Savings, which offers various banking products and services for real estate investors, professionals, entrepreneurs, depositors, and commercial businesses.
For the first quarter ending March 31, 2022, LBC’s net interest income increased 16.3% year-over-year to $45.03 million. Its net income grew 24.6% from its year-ago value to $22.94 million, while its EPS improved 28.6% from its prior-year quarter to $0.45. The cash, cash equivalents, and restricted cash stood at $147.96 million for the three months ended March 31, 2022.
Analysts expect LBC’s revenue to increase 8.4% year-over-year to $44.88 million for the second quarter ending June 2022. Also, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters. The stock has gained 10.2% over the past year.
Closing the last trading session at $13.40, the stock is currently trading above its 50-day and 100-day moving averages of $13.30 and 13.24, respectively.
It is no surprise that LBC has an overall B rating, equating to Buy in our POWR Ratings system. LBC has an A grade for Stability and Momentum and a B for Sentiment. In the D-rated Pacific Regional Banks industry, it is ranked #6 of 42 stocks
Click here to see more of LBC’s component grades (Value, Growth, and Quality).
Orrstown Financial Services, Inc. (ORRF)
ORRF functions as the holding company for Orrstown Bank, which provides commercial banking and trust services in the United States. The company accepts various deposits, including checking, savings, time, demand, and money market deposits.
ORRF’s total interest income amounted to $23.79 million for the first quarter ending March 31, 2022. Its net income came in at $8.37 million, while its EPS stood at $0.76. The cash and cash equivalent increased 2.6% from its previous period to $214.24 million for the three months ended March 31, 2022.
Analysts expect ORRF's revenue to increase 1.2% year-over-year to $21.70 million for the second quarter ending June 2022. The company's EPS is expected to grow 2.9% year-over-year to $0.62 in the fourth quarter ending December 2022. Moreover, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters.
The company’s shares have surged 4.2% over the past year and 9.7% over the past nine months. Closing the last trading session at $25.21, the stock is currently trading above its 50-day and 200-day moving averages of $24.14 and 24.04, respectively.
It is no surprise that ORRF has an overall B rating, equating to Buy in our POWR Ratings system. ORRF has an A grade for Stability and Momentum and a B for Value. In the C-rated Northeast Regional Banks industry, it is ranked #7 of 63 stocks
Click here to see the additional POWR Ratings for ORRF (Growth, Quality, and Sentiment).
Summit Financial Group, Inc. (SMMF)
SMMF functions as a financial holding company for Summit Community Bank, Inc. that offers community banking and other financial services to individuals and businesses primarily in the Eastern Panhandle, Southern and North Central regions of West Virginia and the Northern, Shenandoah Valley, and Southwestern regions of Virginia, and the Central region of Kentucky.
In the first quarter ending March 31, 2022, SMMF’s total interest income increased 10.5% year-over-year to $32.89 million. Its net income grew 12.9% from its year-ago value to $11.69 million, while its EPS rose 12.5% from its prior-year quarter to $0.90.
The $0.96 consensus EPS estimate represents a 14.9% improvement year-over-year for the second quarter ending June 2022. Analysts expect SMMF’s revenue to increase 5.1% year-over-year to $33.14 million for the second quarter ending June 2022. In addition, the company has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters.
The company’s shares have surged 24.5% over the past year. Closing the last trading session at $28.64, the stock is currently trading above its 50-day and 200-day moving averages of $26.72 and $26.37, respectively.
SMMF's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. The stock also has an A grade for Stability and Momentum and a B for Growth. Within the C-rated Mid-Atlantic Regional Banks industry, it is ranked #2 of 36 stocks.
In total, we rate SMMF on eight different levels. Beyond what we've stated above, we have also given SMMF grades for Value, Sentiment, and Quality. Get all the SMMF ratings here.
BSVN shares were trading at $23.90 per share on Monday morning, up $0.14 (+0.59%). Year-to-date, BSVN has gained 4.97%, versus a -17.39% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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