Banks Lead Markets To New Highs: 4 Stocks Worth Buying Now
Zacks Investment Research | Nov 29, 2017 05:28AM ET
The key stock indexes reached new highs yesterday with banking stocks being the main driving force. The rally was supported by favorable economic data, progress on tax reform bill and positive comments by Jerome H. Powell, President Trump's nominee for the Fed chairman. The Dow Jones Industrial Average and S&P 500 rose 1.1% and nearly 1%, respectively.
Powell’s comments related to lesser regulations cheered investors. While affirming the role of the Dodd-Frank Act in making the country’s financial system stronger, he advocates lesser regulatory burden for smaller domestic banks.
Also, Powell reiterated the Fed’s stance on gradual rise in interest rates and winding down of its balance sheet. Further, he said, “I think the case for raising interest rates at our next meeting is coming together.”
No significant change in the Fed’s existing interest rate move is a good sign for the banking sector.
Moreover, tax reform bill, one of the biggest election promises by Trump, got a boost as a Senate panel approved the measure amid persistent concerns from some Republican members. So, the combination of stability in the Fed's policy despite change in leadership and progress on corporate tax cuts boosted investor sentiments.
Further, encouraging economic data supported the rally. U.S. consumer confidence surged to a near 17-year high in November, largely driven by a strong labor market while house prices recorded a significant jump in September. All these point toward an improving economy.
All these favorable factors drove banking stocks higher. The KBW Nasdaq Regional Banking index jumped 3.7% yesterday.
Here are the four banking stocks that have plenty of upside left:
Mansfield, PA-based Citizens Financial Services, Inc. (OBB:CZFS) has gained 22.8% so far this year as against industry ’s gain of 3.5%. Also, the Zacks Consensus Estimate for this Mountlake Terrace, WA-based bank has moved 1.7% upward over the last 30 days to $4.22.
Headquartered in Glen Head, NY, The First of Long Island Corp. (NASDAQ:FLIC) also has a Zacks Rank #2. The stock has gained 6.6% year to date as against 3.4% decline for the industry . Also, the Zacks Consensus Estimate for the current year was revised 1.4% upward over the past month to $1.50.
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Eagle Bancorp, Inc. (NASDAQ:EGBN) , based in Bethesda, MD, has gained 10.3% so far this year as against industry ’s decline of 3.4%. Moreover, the Zacks Consensus Estimate for the current year has moved nearly 1% upward over the past month to $3.33. The stock carries a Zacks Rank #2.
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