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Home Bancshares: Relatively Cheap Valuation Sets Up A H-O-M-B Run Opportunity (NASDAQ:HOMB)

Investment Thesis

Headquartered in Conway, Arkansas, Home BancShares, Inc. (HOMB) is a $16.9 billion asset holding company and parent to Centennial Bank, a Southeastern commercial and retail bank. Centennial provides a wide range of commercial and retail banking services to businesses, developers, and individuals. With its more than 165 branch location, Centennial offers services across the state of Arkansas, the panhandle and south Florida, Alabama’s Gulf Coast and New York City.

While HOMB has continued to grow much faster than bank peers, some have called into question the long-term net interest margin (NIM) potential juxtaposed against the rate of future earnings growth. While credit is difficult to forecast, I do believe future net charge-offs (NCOs) are going to be limited in nature. Expense management has been a clear priority for the management team, and in my mind, it will be the swing factor for future profitability.

Today, my bullish stance is driven by two major variables. First, upon further review of the credit portfolio, I believe that HOMB is set up well to absorb all future NCOs that might hide in the lending portfolio. Second, and this one is geared more for the longer term, I believe the NIM is rather resilient at a ~4.00% level. While it is clear that I do have it working lower, HOMB’s niche lending and superior deal placement should warrant higher loan yields.

It’s always frustrating to see banks prove their strong profitability ratios, only to have shareholders compress valuation simply due to peers working lower. Banks often trade in tandem with one another and their valuations rarely get out of sync, at least from a relative comparison. In my mind, once there are some signs of sustainable economic growth, or a more productive yield curve improvement, I believe HOMB will be one of

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LGI Homes (LGIH) Hits 52-Week High, Can the Run Continue?

Shares of LGI Homes (LGIH) have been strong performers lately, with the stock up 9.9% over the past month. The stock hit a new 52-week high of $127.59 in the previous session. LGI Homes has gained 78.6% since the start of the year compared to the -16.5% move for the Zacks Finance sector and the -17.7% return for the Zacks Real Estate – Development industry.

What’s Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn’t missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 4, 2020, LGI Homes reported EPS of $2.21 versus consensus estimate of $1.49 while it beat the consensus revenue estimate by 4.3%.

For the current fiscal year, LGI Homes is expected to post earnings of $9.16 per share on $2.12 billion in revenues. This represents a 30.63% change in EPS on a 15.28% change in revenues. For the next fiscal year, the company is expected to earn $10.24 per share on $2.4 billion in revenues. This represents a year-over-year change of 11.78% and 13.13%, respectively.

Valuation Metrics

LGI Homes may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style

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‘How many Nigerians have cars, run generators in their homes that they need this fuel?’ Presidency defends fuel price hike

Garba Shehu, EFCC, NDDC, NSITF
Garba Shehu

The Presidency has continued to defend the recent hike in petrol prices, as spokesman Garba Shehu on Friday questioned how many Nigerians benefit from low fuel charges.

The Buhari administration earlier this year put in motion plans to cut out fuel subsidy and deregulate the petroleum downstream sector.

Since then, prices of petrol have fallen, in line with a dip in international demand attributed to the coronavirus pandemic.

However, in September, the price of petrol went up, sparking outrage among many Nigerians.

According to Channels Tv, Some have blamed the government for allowing the prices to rise even as many Nigerians are still dealing with the effects of the pandemic.

On Friday, during an interview on Channels Television’s Politics Today, Mr Shehu argued that it is unfair for poor Nigerians to continue to subsidise the lifestyle of urban dwellers.

“We belong to a global market system,” Mr Shehu said. “We are buying, mostly, refined products from the international markets.

“Is it fair that the taxpayer’s money . . . how many Nigerians have cars anyway? How many of them run generators in their homes that they need this fuel for? Is it fair that the farmer and the herder and all of these low-level people in our society, that the taxpayer money is taken from them and is subsidising the lifestyle of our city, urban dwellers?

“So the President is just trying to be as practical as possible on this matter.”

Deregulation is the answer
Mr Shehu also defended President Muhammadu Buhari’s comments on Independence day, where he compared the price of fuel in Nigeria with that obtained in Saudi Arabia.

He said: “So Saudi Arabia is important in this discussion because what is the technical cost of producing a barrel of oil in Saudi Arabia? It’s not

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So many homes are selling that we could run out of new houses in months



a house with a mountain in the background: A house is the most desirable get amid the coronavirus pandemic, but the US is barreling toward an inventory shortage and affordability crisis that'll make homeownership unattainable. John M Lund/Getty Images


© Provided by Business Insider
A house is the most desirable get amid the coronavirus pandemic, but the US is barreling toward an inventory shortage and affordability crisis that’ll make homeownership unattainable. John M Lund/Getty Images

  • The hottest pandemic purchase is a house, as more and more Americans take advantage of low mortgage rates to attain spacious backyards and more comfortable work-from-home locales.
  • Existing home sales, which have trended upward for the last 3 months since the housing market reopened from shutdown, soared to a 14-year high in August. New home sales are also up.
  • Home prices are soaring, too, recording the highest two-month appreciation between May and July — at 2% — in 30 years of record-keeping.
  • But not enough new houses are being built to keep up with demand, a trend that actually goes back a decade.
  • Homebuying, in all its trendy glory, only projects to get more expensive, if not impossible. If homes keep selling at this rate, Bloomberg estimates the inventory of new homes could actually run out in just a few months.
  • Visit Business Insider’s homepage for more stories.

 

Have you thought about moving amid the coronavirus pandemic?

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Is your Instagram feed littered with captions reading “Surprise! We bought a house!” underneath photos of couples posing with sets of keys and whimsically colored front doors? Have you seen unbearably long lines for open houses in your own neighborhood?

If it seems like the hottest pandemic purchase is a home, well, it’s not just your hunch telling you that.

A shocking volume of homes are selling rapidly, according to new data. The National Association of Realtors (NAR) released a report on Tuesday finding that existing home sales reached a 14-year high in August. In fact, Bloomberg reported that if homes continue to sell at

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Space Station bathroom renovation launching on next cargo supply run

It’s a home makeover but 200 miles above Earth: The next resupply delivery mission to the International Space Station will include a new re-designed commode for the astronauts.

A cargo re-supply launch is scheduled to liftoff on a Northrop Grumman Antares rocket Sept. 29 from NASA’s Wallops Island Flight Facility carrying supplies for the astronauts, research, hardware and a marketing experiment for the makeup company Estee Lauder.

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Loaded up among nearly 8,000 pounds of supplies, the Northrop Grumman’s Cygnus cargo spacecraft will also deliver a new “Universal Waste Management System,” also known as a space toilet, to the floating laboratory in space and home to astronauts 365 days a year.

The system actually has two important purposes on the ISS. Outside the bathroom needs, it also cleans water to be used again by the astronaut

“We recycle about 90% of all water-based liquids on the space station, including urine and sweat,” NASA astronaut Jessica Meir said in a news release. “What we try to do aboard the space station is mimic elements of Earth’s natural water cycle to reclaim water from the air. And when it comes to our urine on ISS, today’s coffee is tomorrow’s coffee!”

The engineers behind the low-gravity loo spoke about the technology during a press call Thursday with reporters.

The new toilet design will be used on the ISS and for NASA’s second Artemis mission to the moon with astronauts. According to government contracts, NASA awarded contracts totaling more than $23 million to design and build the new system.

The new toilet is 65% smaller and 40% lighter than the current potty on the ISS. It’s about the same size as

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