Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is certainly no Citigroup Inc. (NYSE:C) or Bank of America Corp. (NYSE:BAC), but then again, that may be a good thing - both larger banks are still dealing with the headaches of their sheer size. The smaller bank is far more nimble, and better still, appears to be on the verge of doling out a huge reward for shareholders.
Seacoast Banking Corporation of Florida is a (as the name implies) a Florida-based regional banking company. For perspective, the $212 million market cap SBCF boasts is dwarfed by the Citigroup market cap of $152 billion, and the Bank of America market cap of the same... $152 billion. As they say, though, all things are relative - SBCF is still packing a potential punch that C or BAC shares aren't right now.
There are a couple of reasons and clues this is so, one of which is simply the shape of the chart - SBCF bushed a key support level a couple of weeks ago, and has since pushed up and off that floor on higher volume.
The daily chart of Seacoast Banking Corporation of Florida tells the tale. That key line in the sand that prodded a reversal of a lethargic pullback was the 200-day moving average line (green) in early October. All it took was a touch, and poof - the bulls were running again. In the mean time, we've seen no major setbacks, but we have seen two decided accumulation (high-volume buy-in) days since the brush of the 200-day moving average line. Better still, it looks as if all of the shorter-term moving average lines have started to act as a technical floor for SBCF shares.
That's not even the most technically-compelling aspect of Seacoast Banking Corporation of Florida shares right now. When you take a step back and look at a much longer-term weekly chart, you'll see there's a paradigm shift for the better underway. Click here an appropriately-sized image of said chart. What you'll see is a stock that consolidated for more than a couple of years between $1.10 and $1.95, and over the course of the past ten months or so has wiggled its way out of a sideways range and into a rising/bullish channel. The brewing effect of that consolidation phase has already been put into place, though, and we're due for a lot more upside than the 15% rally we've seen above the upper edge of that range at $1.95. The added upside of getting into SCBF right now is that we've just kissed the lower edge of the new rising trading range; there's a lot of near-term upside potential to get us started on the right foot.
The clincher for all the bullishness is the fact that Seacoast Banking Corporation of Florida is supporting it with legitimate earnings growth. The company is projected to swing to a profit of $0.07 per share this year versus a loss of $0.05 per share last year, and continue at that pace in 2014 when it's expected to earn $0.09 per share. It's only 2 cents per share, but it's a 28% increase. Eat your hearts out Bank of America and Citigroup.
If you'd like to receive more trading ideas and insights like this one, you want to subscribe to the free daily SmallCap Network e-newsletter.
No comments:
Post a Comment