First Bancshares Rising Large Players Volume on Earnings Beat
First Bancshares stock has rising large player volume on an earnings beat. First Bancshares reported Q2 EPS of $0.44 versus the $0.36 estimate. Revenue also beat coming in at $20.2 million versus the $18.9 million estimate.
First Bancshares has been making interesting merger and acquisition moves over the last year. Last quarter, the Company’s common stock was included in the Russell 2000 Index for the first time.
First Bancshares Stock Chart
Large players volume has been slowly rising as the stock has dropped. That positive diverge is also confirmed by the Twiggs Money Flow. Both large players volume and the Twiggs Money Flow favors the Bulls.
FBMS is an ok setup but it doesn’t really thrill me though. Yes, prices have been consolidating lately and the volatility has been reduced setting up a momentum squeeze.
What I don’t like about this momentum squeeze setup is that the stock has been signaling a such a squeeze for many months now. Ideally, we want stocks that swing hard on a momentum squeeze signal. This stock clearly does not do that which is bearish IMO.
There is a resistance zone just above the current price starting at 27.18. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 26.94, a stop order could be placed below this zone. We notice that large players showed an interest for FBMS in the last couple of days, which is a good sign.
First Bancshares Review
- Profitability (Return On Assets, Return On Equity, and Profit Margin)
- Valuation (P/E, Forward P/E, PEG, Book Value, Price to Book Ratio)
- Growth (EPS and Revenue)
- Health (Current Ratio, Quick Ratio, Debt to Equity, Altman-Z Score)
First Bancshares (FBMS) profitability is not very good. The company has a Return On Equity of 9.11% which is inline with the rest of the industry but it has a Return On Asserts (ROA) of only 0.82%. The ROA is below the industry average of 0.98% which means a whopping 81% of industry peers outperform First Bancshares (FBMS). The comany has a Profit Margin of 100.42%. This is below the industry average of 100.96%.
The valuation of FBMS is not very good. The company trades at a Price/Earnings Ratio of 20.73 which means FBMS is valued on the expensive side. The Forward Price/Earnings Ratio of 16.23 indicates a correct valuation of FBMS. When comparing the current price to the book value of FBMS, it is trading at 1.55 times its book value which is means the stock is valued inline with its industry peers. FBMS's Price/Earning Ratio is slightly more expensive than the industry average, which is at 18.77. The high PEG Ratio, which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The company's best fundamental metric is its growth. The Earnings Per Share has been growing by 20% on average over the past 5 years. This is quite good. FBMS is expected to show a strong growth in Earnings Per Share over the next 2 years, with an estimated EPS growth of 12.36% yearly. When comparing the growth rate of the last year to the growth rate of the upcoming 2 years, we see that the growth is accelerating. Revenue has been growing by 18.42% on average over the past 5 years which is quite good.
The overall health of FBMS is poor. The Debt to Equity ratio of FBMS is inline with the industry averages. Based on the Altman-Z score of 0.17, it suggests that FBMS is in the distress zone and has some risk of bankruptcy. When comparing the Altman-Z score of FBMS to the average industry Altman-Z score of 0.24, FBMS is less financially healthy than its industry peers. A whopping 85% of its industry peers have a better Altman-Z score.
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