With the CapStar Financial Holdings (CSTR) quiet period coming to a close on Monday, investors have an excellent opportunity to establish a long position this week and then ride the stock higher once underwriter reports are released.
Investors should buy shares during the next few trading sessions, hold those positions until Tuesday and sell their long positions once the reports are released. But because trading volume has been on the light side, investors might want to establish that long position over several days, rather than purchasing shares all at once ahead of the quiet period expiration.
The underwriter reports will likely be positive, and the stock is poised to rise as a result. The holding company for regional CapStar Bank has good fundamentals, and the IPO was well priced and has risen since its debut.
The company went public on Sept. 21 at $15, in the middle of the expected price range of $14.60 to $16.50, and rose 6% that day. The stock is up about 18% since then.
CapStar Financial Holdings is based in Nashville, Tenn., and has seven locations. Five of those are retail branches, and the other two are mortgage origination offices.
CapStar Financial Holdings and CapStar Bank have a total of $1.3 billion in assets.
CapStar Bank is a commercial bank with locations in the greater metropolitan area of Nashville.
Last year, CapStar Financial Holdings generated net income of $7.6 million, up 51.4% from 2014. During the same time, return on average assets and return on average equity were 0.66% and 7.08%, respectively.
Between Dec. 31, 2011, and June 30, 2016, the company generated a compound annual growth rate of 14.5% for its assets and total deposits and 19.1% for total loans.
Claire W. Tucker, CapStar Financial Holdings' CEO, president and director, has more than 21 years of experience in the banking sector. Robert Anderson, the company's chief administrative officer and chief financial officer, has 20 years' experience in the finance industry.
The underwriting team includes Wall Street heavy hitters Keefe Bruyette & Woods, Raymond James, Sandler O'Neil and Stephens.