Regional banks have been stuck in the proverbial mud these past few months, but signs point to new life as a potent breakout across the industry is occurring in stride with new highs being set by the broader equity market indices.
With earnings season now underway, we thought now would be the perfect time to do an advanced banking screen in Profit Scanner to determine what opportunities exist for profit in the regionals.
Today, we’ll look at three relatively unknown plays making a compelling case to be on the receiving end of your investment dollar.
Regional Bank Stocks to Buy: Banner Corporation (BANR)
Click to Enlarge Banner Corporation (NASDAQ:BANR) is a regional bank that provides commercial banking and financial products and services to individuals, businesses and public sector entities. At the end of last year, Banner Bank operated 199 branch offices and nine loan production offices in Washington, Oregon and Idaho.
Using Profit Scanner, we noticed a “diamond bottom” technical pattern as shown in the adjacent chart. This development is considered to be a bullish signal, indicating a possible reversal of the current downtrend to a new uptrend. That said, it’s quite common for diamond bottoms to form over several months, especially in active markets. Volume also tends to remain high during the formation of this pattern as well.
Diamond bottom patterns occur because prices create higher highs and lower lows in a broadening pattern. Then, the trading range gradually narrows after the highs peak and the lows start trending upward. Using Profit Scanner’s event signals, we were alerted the moment the stock broke out of the pattern, indicating that now may be the best time to establish a long position in BANR.
With an intermediate-term price target of $49.25 and a current price of $43.34, investors could see gains up to 13.61%. The company is set to release earnings on July 26. Shares will likely confirm the outlook above, but it would be wise to keep an eye on an activity around that date.
Regional Bank Stocks to Buy: First Community Corporation (FCCO)
Click to Enlarge First Community Corporation (NASDAQ:FCCO) offers various commercial and retail banking products and services to small-to-medium sized businesses, professional concerns and individuals. The company is recently known to operate 15 banking offices located in the Midlands of South Carolina; Aiken, South Carolina; and Augusta, Georgia areas.
The “continuation diamond” shown in the chart below is considered a bullish signal for FCCO, indicating that the current uptrend is likely to continue in the months ahead.
The pattern description itself is essentially the same as what we currently see with BANR above. However, this time, the price formation serves as a continuation of an uptrend instead the bottom of one.
With an intermediate-term price target of $15.60 and a current price of $14.50, investors could see gains up to 7.58%. First Community already reported earnings on July 20.
Regional Bank Stocks to Buy: Hanmi Financial Corp (HAFC)
Click to Enlarge Hanmi Financial Corp (NASDAQ:HAFC) provides business banking products and services throughout the United States. Headquartered out of Los Angeles, the company operates 42 full-service branches and six loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington and Georgia.
While shares had been trading in a sideways range, we are now seeing renewed strength following a break through resistance as the upward trend appears to have resumed on strong buying support.
With an intermediate-term price target of $26.70 and a current price of $24.71, investors could see 8.05% returns. Hanmi Financial reported earnings on July 19.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.