NEW YORK (
-- BNC Bancorp
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, growth in earnings per share and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.2%. Since the same quarter one year prior, revenues rose by 20.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 13.6% when compared to the same quarter one year prior, going from $1.52 million to $1.73 million.
- BNC BANCORP has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BNC BANCORP reported lower earnings of $0.45 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.45).
- After a year of stock price fluctuations, the net result is that BNCN's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, BNC BANCORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
BNC Bancorp operates as the holding company for Bank of North Carolina that provides various commercial banking products and services to individuals, and small and medium size businesses. The company has a P/E ratio of 16.7, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. BNC has a market cap of $68.3 million and is part of the
industry. Shares are up 4.8% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff