Last week, I highlighted my growth screen and promised a follow up on each stock if possible. I've chosen to analyze Sierra Bancorp (NASDAQ:BSRR), which offers various banking services to individuals and businesses primarily in the central and southern sections of California’s San Joaquin Valley.
Catalysts that make BSRR a potential buy:
BSRR's EPS growth for this quarter relative to the same quarter a last year was 38.89%. Furthermore, growth from Q4 to Q1 beat estimates, for this year and next, by more than 25%. This bodes well for BSRR. BSRR has had an annual earnings growth rate over the past five years of 21.32%. BSRR's annual EPS before extraordinary items for the last 5 years were 0.75, 0.91, 1.03, 1.31, 1.56. Constantly increasing, another positive When considering a growth stock, I like to keep an eye open for stocks that are trading within 15-20% of their 52-week highs, as the stock price is potentially close to breaking out to a new high on above average volume. BSRR's current stock price, $31.41, is within 15% of the 52-week high 33.37. (I belong to the Buy High, Sell Higher cohort! thanks to Will O'Neal, IBD Founder) In my growth list, a criteria was RSI of at least 80 (as I wanted to screen companies with recent strong momentum). BSRR's relative strength trend has been increasing over the last 4 months. BSRR's relative strength of 80 is at an acceptable level and price action is favorable. I believe up to 40% of stock picking is sector. Like they say, "A good house in a bad neighbourhood is still bad, and vice versa." By screening the Regional Banks sector, I noticed there are 50ish companies that have a relative strength at or above 80 and is one of the top performing industries. For my growth screen, another criteria was high insider ownership. Investors like to place their bets on companies where the management has a big stake in the company (Reminiscent of the Gordan Gekko Speech during Teldar Paper shareholder meeting). Insiders own 36% of BSRR's stock. (Gordon would be proud!)
BSRR 1-yr Chart
Disclosure: I do not own the stock