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4 Reasons to Add Bank of Commerce (BOCH) to Your Portfolio


Favorable economic data, progress on tax reform bill and positive comments by Jerome H. Powell — President Trump's nominee for the Fed chairman — have been driving investors’ confidence in banking stocks. Therefore, some of these stocks are profitable additions to a portfolio, based on strong fundamentals and solid long-term prospects.

With cost-reduction initiatives and remarkable balance-sheet growth, Bank of Commerce Holdings BOCH appears to be one such stock. Additionally, the bank’s shares have gained 27.4% so far this year compared with 9.9% growth recorded by the industry.

Why is Bank of Commerce Holdings an Attractive Pick?

Strong Organic Growth: The company’s net revenues witnessed compounded annual growth rate (CAGR) of 8.7% over the last three years, ending 2016, and also displayed an uptrend in the first nine months of 2017. The company’s projected sales growth (F1/F0) of 15.97%, as against the industry average of 2.75%, indicates continued upward momentum in revenues.

Earnings Growth: Bank of Commerce Holdings witnessed earnings growth of 10% over the last three-five years. In addition to this, the company’s long-term (three-five years) estimated EPS growth rate of 7% promises rewards for investors over the long run.

Favorable Zacks Rank: Bank of Commerce Holdings currently carries a Zacks Rank #2 (Buy). The bullish rank has been driven by upward earnings estimate revisions for the past two months. For 2017, the Zacks Consensus Estimate moved up 9.5% to 69 cents, while for 2018, it climbed 5.4% to 78 cents.

Stock is Undervalued: Bank of Commerce Holdings has P/E and P/B ratios of 17.81 and 1.55, compared to the industry average of 19.2 and 1.84, respectively. Based on these ratios, the stock seems undervalued.

Stocks to Consider

Federated Investors Inc. FII has been witnessing upward estimate revisions for the last 60 days. The company’s share price has been up around 24% in six months’ time. It flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enterprise Financial Services Corporation EFSC has been witnessing upward estimate revisions for the same time frame. Additionally, the stock has gained more than 11% in six months’ time. It currently carries a Zacks Rank of 2.

First Financial Bancorp FFBC has been witnessing upward estimate revisions for the past month. Also, the company’s shares have risen nearly 5.6% in a year’s time. It holds a Zacks Rank of 2, at present.

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