After rising 67% in the past 52-weeks, it is understandable that the price targets for First Financial Bankshares (FFIN) are slightly under the bank's current market price of $57.69 per share. But, the premium paid for these shares appear to be warranted.
First Financial is one of the fastest growing regional banks in Texas (though all appear to be very fast growing) but it is one that has a very unique strategy that I believe gives the bank a competitive advantage that isn't found in most of the its regional peers.
I'm timid of the current market valuation of FFIN because it is getting a premium well above the industry average but, the bank is setting up for long-term growth and isn't showing any signs of slowing down anytime soon. With that said, below I have outlined why I like First Financial's strategy and financial position, followed by a review of the company's current valuation.
Strategy
A lot of times we see a growing regional bank increase deposit share and assets by purchasing other regionals in an area where they are weak and need more exposure. This makes sense for obvious reasons but other than increased visibility and access to the local markets, investors rarely understand why that particular location was chosen for growth over any of the other areas the bank occupies. With First Financial, this is absolutely not an issue and, to be honest, I'm extremely surprised that any bank in Texas has been able to dominate any area as much as FFIN has.
Hot Energy Companies To Invest In Right Now: HFF Inc (HF)
HFF, Inc. is a provider of commercial real estate and capital markets services to both the users and providers of capital in the United States commercial real estate industry. It is a full-service commercial real estate financial intermediary in the United States. As of December 31, 2011, the Company operated out of 20 offices nationwide. During the year ended December 31, 2011, the Company advised on approximately $35.6 billion of completed commercial real estate transactions. The Company offers debt placement, investment sales, distressed debt and real estate owned advisory services, structured finance, private equity placement, investment banking services, loan sales and commercial loan servicing. In October 2011, the Company sold Las Olas City Centre. In March 2012, the Company sold 801 9th Street, NW, a 236,054 square-foot, Class A office building in Washington, D.C. In July 2013, the Company announced that it has closed the sale of Washington Harbour, a 557,961-square-foot, mixed-use project located along the Potomac River in Washington, D.C.'s Georgetown submarket. In September 2013, the Company announced that it has closed the sale of Greenway Plaza, a 4.4 million-square-foot, Class A office complex in Houston, Texas, and 777 Main, a 980,374-square-foot Class A office property in Fort Worth, Texas. In November 2013, HFF Inc closed the sale of The Granary. In November 2013, the Company�� subsidiary, Holliday Fenoglio Fowler, L.P. sold Avalon on the Sound East, a 588-unit, 39-story, Class A multi-housing tower in New Rochelle, New York. In December 2013, HFF Inc sold its Pacific Commons Shopping Center, an 865,783-square-foot center in Fremont. In January 2014, HFF Inc has closed the sale of 225 West Santa Clara, a 16-story, 349,318-square-foot, transit-oriented trophy office property in downtown San Jose, California. In January 2014, HFF, Inc. sold two Central Florida Publix-anchored retail properties in Orlando and suburban Tampa, and sold eight-property, fully leased industrial portfolio in! the Meadowlands submarket of New Jersey. In January 2014, HFF Inc closed the sale of 800 Madison, a 217-unit, Class A multi-housing community with ground floor retail in Hoboken, New Jersey.
Debt Placement Services
The Company offers its clients a range of debt instruments, including but not limited to, construction and construction/mini-permanent loans, adjustable and fixed rate mortgages, entity level debt, mezzanine debt, forward delivery loans, tax exempt financing and sale/leaseback financing. Its clients are owners of various types of property, including, but not limited to, office, retail, industrial, hotel, multi-housing, self-storage, assisted living, nursing homes, condominiums and condominium conversions, mixed-use properties and land. The Company�� clients range in size from individual entrepreneurs who own a single property to the large real estate funds and institutional property owners worldwide who invest globally, especially in the United States. Debt is or has been placed with capital funding sources, both domestic and foreign, including, but not limited to, life insurance companies, conduits, investment banks, commercial banks, thrifts, agency lenders, pension funds, pension fund advisors, real estate investment trusts (REITs), credit companies, opportunity funds and individual investors. In 2011, its transaction volume in debt placements was approximately $18.7 billion.
Investment Sales Services
The Company provides investment sales services to commercial real estate owners who are seeking to sell one or more properties or property interests. In 2011, it completed investment sales of approximately $12.6 billion.
Structured Finance and Private Equity Services
The Company offers an array of structured finance and private equity alternatives and solutions at both the property and ownership entity level. In 2011, it completed approximately $2 billion of structured finance and advisory services transactions.
Private Equity, Investment Banking and Advisory Services
The Company�� broker-dealer subsidiary, HFF Securities L.P. (HFF Securities), undertakes both discretionary and non-discretionary private equity raises, select property specific joint ventures and select investment banking activities for its clients. At December 31, 2011, it had $1.9 billion of active private equity discretionary fund transactions. Through HFF Securities, it offers its clients the ability to access the private equity markets for an identified commercial real estate asset and discretionary private equity funds, joint ventures, entity-level private placements and advisory services, as well as structured finance services. HFF Securities��services to its clients include joint ventures, private placements, advisory services, and marketing and fund-raising.
Loan Sales
The Company assists its clients to sell all or portions of their commercial real estate debt note portfolios, which can include performing, non-performing and distressed debt and/or real estate owned properties. It had consummated $2.3 billion in loan sales transactions in 2011.
Commercial Loan Servicing
The Company provides commercial loan servicing (primary and sub-servicing) for life insurance companies, Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae) through relationships with a range of delegated underwriting and servicing (DUS) lenders, commercial mortgage-backed securities (CMBS) originators, mortgage REITS and debt funds, groups that purchase performing and/or non-performing loans, as well as owners who sell commercial real estate subject to a purchase money mortgage. During 2011, it had approximately 35 correspondent lender relationships with life insurers.
The Company competes with CBRE Capital Markets, Cushman & Wakefield, Eastdil Secured, Jones Lang LaSalle, Northmarq Capital and Berkadia.
Advisors' Opinion:- [By Hilary Kramer]
2. Real Estate Investment Trusts (REITs) The REIT is another alternative vehicle that's gone mainstream in recent years. Hundreds of broad-based and specialized real estate companies and ETFs are available, and after a correction a few months ago, many are on the cheap side. Like any other alternative, this should be a seasoning for your portfolio and not the sauce itself. For most retail investors, a stake in an indexed fund like the SPDR Dow Jones REIT (NYSE: RWR) should be more than adequate, or look into the companies that provide services to the REIT industry like HFF (NYSE: HF) and Jones Lang LaSalle (NYSE: JLL).
Top 5 Regional Bank Stocks To Buy For 2014: OMNOVA Solutions Inc.(OMN)
OMNOVA Solutions Inc. provides emulsion polymers, specialty chemicals, and decorative and functional surfaces for commercial, industrial, and residential end uses primarily in North America, Europe, and Asia. The company operates in two segments, Performance Chemicals and Decorative Products. The Performance Chemicals segment offers a range of emulsion polymers and specialty chemicals based primarily on styrene butadiene, styrene butadiene acrylonitrile, styrene butadiene vinyl pyridine, nitrile butadiene, polyvinyl acetate, acrylic, styrene acrylic, vinyl acrylic, glyoxal, phenolic and diphenylamine antioxidants, hollow plastic pigment, fluorochemicals, and bio-based chemistries. Its custom-formulated products include tailored resins, binders, adhesives, specialty rubbers, antioxidants, and elastomeric modifiers, which are used in paper, specialty coatings, carpets, nonwovens, construction, oil/gas drilling, adhesives, tapes, tire cords, floor care, textiles, graphic arts , polymer stabilization, industrial rubbers and hoses, bio-based polymers, and various other applications. This segment primarily sells its products directly to manufacturers. The Decorative Products segment develops, designs, produces, and markets a line of functional and decorative surfacing products, including coated fabrics, vinyl, paper and specialty laminates, and performance films. Its products are used in various applications, such as commercial building refurbishment, remodeling, and new construction; residential cabinets, flooring, and furnishings; retail display; transportation markets; recreational vehicles; manufactured housing; medical devices and products; and various industrial film applications. This segment distributes its products primarily through a direct sales force; and agents to manufacturers of cabinets, furniture, seating, health care and medical components, and other products. OMNOVA Solutions Inc. was founded in 1999 and is headquartered in Fairla wn, Ohio.
Advisors' Opinion:- [By Ben Levisohn]
Omnova Solutions (OMN) has fallen 3.8% to $8.36 after it said it earned 19 cents a share, missing forecasts of 22 cents.
Chipotle Mexican Grill (CMG) has gained 1.6% to $425.84 after it was upgraded to Overweight from Equal Weight by Morgan Stanley, while Panera Bread (PNRA) has fallen 1.7% to $161.25 after the investment bank downgraded it to Equal Weight from Overweight.
- [By Monica Gerson]
OMNOVA Solutions (NYSE: OMN) is estimated to report its Q4 earnings at $0.12 per share on revenue of $226.00 million.
CA Technologies (NASDAQ: CA) is expected to post its Q3 earnings at $0.71 per share on revenue of $1.13 billion.
- [By Sean Williams]
Chemical reaction
The disappointments are starting to mount for investors in OMNOVA Solutions (NYSE: OMN ) , an emulsion polymer and specialty chemicals maker that has missed the Street's estimates in worsening fashion for three straight quarters. Its first-quarter results, released earlier this month, showed a 9% decline in total revenue from the year-ago period because of lower volumes in Europe and India, and business seasonality. However, optimistic contentions could also be made based on this same earnings report.
Top 5 Regional Bank Stocks To Buy For 2014: Galena Biopharma Inc (GALE)
Galena Biopharma, Inc. (Galena), formerly RXi Pharmaceuticals Corporation, incorporated on April 3, 2006, is a biotechnology company focused on discovering, developing and commercializing therapies addressing unmet medical needs using targeted biotherapeutics. The Company is pursuing the development of cancer therapeutics using peptide-based immunotherapy products, including its main product candidate, NeuVaxTM (E75), for the treatment of breast cancer and other tumors. NeuVax is a peptide-based immunotherapy intended to reduce the recurrence of breast cancer in low-to-intermediate HER2-positive breast cancer patients not eligible for trastuzumab (Herceptin; Genentech/Roche). On January 19, 2012, the Company initiated enrollment in its Phase 3 PRESENT clinical trial for NeuVax (E75 peptide plus GM-CSF) vaccine in low-to-intermediate HER2 1+ and 2+ breast cancer patients in the adjuvant setting to prevent recurrence (Clinicaltrials.gov identifier NCT01479244). The Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment study is a randomized, multicenter, multinational clinical trial that will enroll approximately 700 breast cancer patients. The Company�� Phase 2 trial of NeuVax achieved its primary endpoint of disease-free survival (DFS). On April 13, 2011, the Company completed its acquisition of Apthera, Inc.,(Apthera).
The Company focuses to start a Phase 2 trial comparing NeuVax in combination with trastuzumab (Herceptin) versus trastuzumab, alone, in a 300-patient, randomized study in the adjuvant breast cancer setting. The Company's second product candidate, Folate Binding Protein-E39 (FBP), is a vaccine, consisting of the peptides E39 and J65, aimed at preventing the recurrence of ovarian, endometrial, and breast cancers. On February 14, 2012, the Company announced the initiation of a Phase 1/2 clinical trial in two gynecological cancers: ovarian and endometrial adenocarcinomas. Folate binding protein has ! very limited tissue distribution and expression in non-malignant tissue and is over-expressed in more than 90% of ovarian and endometrial cancers, as well as in 20% to 50% of breast, lung, colorectal and renal cell carcinomas.
In April 2011, the Company acquired Apthera Inc and its NeuVax product candidate. The Company focuses on developing a pipeline of immunotherapy product candidates for the treatment of various cancers based on the E75 peptide, the advanced of which is NeuVax, which is targeted at preventing the recurrence of breast cancer. NeuVax has had positive Phase 1/2 clinical trial results for the prevention of breast cancer recurrence in patients who have had breast cancer and received the standard of care treatment (surgery, chemotherapy, radiotherapy and hormonal therapy as indicated). The Company had also initiated its Phase 3 PRESENT clinical trial of NeuVax for the prevention of breast cancer recurrence in early-stage low-to-intermediate HER2 breast cancer patients. NeuVax directs killer T-cells to target and destroy cancer cells that express HER2/neu, a protein associated with epithelial tumors in breast, ovarian, pancreatic, colon, bladder and prostate cancers. NeuVax is comprised of a HER2/neu-derived peptide called E75. E75 is a nine-amino acid sequence that is immunogenic (produces an immune response) and GM-CSF is a commercially available protein that acts to stimulate and activate components of the immune system such as macrophages and dendritic cells.
The Company also develops novel applications for NeuVax based on preclinical studies and phases 2 clinical trials which suggest that combining NeuVax and trastuzumab (Herceptin; Genentech/Roche) can increase antigen presentation by tumor cells by promoting receptor internalization and subsequent proteosomal degradation of the HER2 protein. The Company also is pursuing additional therapeutic indications for NeuVax that are in Phase 1/2 clinical trials. RXI-109, is a dermal anti-scarring therapy that targets! connecti! ve tissue growth factor (CTGF) and that may inhibit connective tissue formation in human fibrotic disease.
The Company competes with Roche Laboratories, Inc., Pfizer Inc., Bayer HealthCare AG, Sanofi-Aventis, US, LLC, Amgen, Inc., GlaxoSmithKline plc, Renovo Group plc, CoDa Therapeutics, Inc., Sirnaomics, Inc., FirstString Research, Inc., Merz Pharmaceuticals, LLC, Capstone Therapeutics, Halscion, Inc., Garnet Bio Therapeutics, Inc., AkPharma Inc., Promedior, Inc., Kissei Pharmaceutical Co., Ltd., Eyegene, Derma Sciences, Inc., Healthpoint Biotherapeutics, Pharmaxon, Excaliard Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., Marina Biotech, Inc., Tacere Therapeutics, Inc., Benitec Limited, OPKO Health, Inc., Silence Therapeutics plc, Quark Pharmaceuticals, Inc., Rosetta Genomics Ltd., Lorus Therapeutics, Inc., Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Regulus Therapeutics Inc. and Santaris.
Advisors' Opinion:- [By Sean Williams]
The waiting game
The tables are clearly stacked against small biotech companies developing cancer drugs. History has shown that few (if any) have successfully had the Food and Drug Administration approve a late-stage cancer drug. While mid-stage trials of Galena Biopharma's (NASDAQ: GALE ) HER2-targeting breast cancer vaccine have been promising thus far, the chances of an approval seem a long way off. - [By Paul Ausick]
Stocks on the move: Galena Biopharma Inc. (NASDAQ: GALE) is down 15.4% at $1.93 after pricing a secondary offering of 17.5 million units at $2.00. Safeway Inc. (NYSE: SWY) is up 6.1% at $28.21, after an analyst�� upgrade which sent shares to a new 52-week high of $28.88 earlier. Avanir Pharmaceuticals Inc. (NASDAQ: AVNR) is down 18.2% at $4.08.
Top 5 Regional Bank Stocks To Buy For 2014: NN Inc.(NNBR)
NN, Inc. engages in the manufacture and sale of metal bearing, plastic and rubber, and precision metal components for bearing manufacturers worldwide. It operates in three segments: Metal Bearing Components, Plastic and Rubber Components, and Precision Metal Components. The Metal Bearing Components segment manufactures precision steel balls that are used primarily by manufacturers of anti-friction bearings; steel rollers comprising tapered rollers used in automotive gearbox applications, automotive wheel bearings, and various industrial applications; cylindrical rollers; and precision metal retainers for roller bearings. The Plastic and Rubber Components segment offers precision bearing seals for use in the automotive, industrial, agricultural, and mining markets; precision plastic retainers for ball and roller bearings used in various industrial applications; and precision plastic components, including automotive under-the-hood components, electronic instrument cases, pre cision electronic connectors and lenses, and various specialized industrial and consumer parts. The Precision Metal Components segment provides engineered shafts, fluid power assemblies, and complex precision assembled and tested parts used in the automotive, HVAC, fluid power, and diesel engine markets. The company was founded in 1980 and is based in Johnson City, Tennessee.
Advisors' Opinion:- [By Marc Bastow]
Precision ball-bearings and tapered rollings manufacturer NN, Inc. (NNBR) raised its quarterly dividend 16.6% to 7 cents per share, payable March 14 to shareholders of record as of Feb. 28.
NNBR Dividend Yield: 1.47% - [By Eric Volkman]
NN (NASDAQ: NNBR ) has a new man in the CEO chair. Richard Holder has been tapped to be the firm's CEO, effective June 3. He replaces the retiring Roderick Baty. Holder will also assume Baty's board seat, the term for which runs through NN's annual meeting in 2015.
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