Why FedFirst Financial (FFCO) Stock Jumped Today

NEW YORK (TheStreet) -- FedFirst Financial (FFCO) shares are up 7.8% to $21.63 in trading on Tuesday.

The increase follows a merger agreement with CB Financial Services  (CBFV).

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The two companies announced that they were merging Monday afternoon. The cash and stock deal is worth approximately $54.5 million.

The new company will have about $860 million in assets. 

"Blending the high performance cultures of both First Federal and Community Bank into one will create a financial services company that is well positioned to return great value to shareholders, customers, employees and the communities it serves," FedFirst CEO Patrick G. O'Brien said.

TheStreet Ratings team rates FEDFIRST FINANCIAL CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FEDFIRST FINANCIAL CORP (FFCO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, increase in stock price during the past year, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 151.83% to $1.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 104.80%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for FEDFIRST FINANCIAL CORP is currently very high, coming in at 75.78%. Regardless of FFCO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.58% trails the industry average.
  • FEDFIRST FINANCIAL CORP's earnings per share declined by 15.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, FEDFIRST FINANCIAL CORP increased its bottom line by earning $0.91 versus $0.80 in the prior year.
  • You can view the full analysis from the report here: FFCO Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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