Monday, July 03, 2006

Reader Email: HBHC

One Reader Asks I saw you spit venom at Hancock Holding Company (HBHC) on another stock research site. What gives?

We Answer Hancock is a Mississippi bank/holding company with 100 branches, 120 ATMs, and more than $6B in assets UM. We like the balance sheet but don't like that management thinks loan growth won't pick up until late '06. At 19 x, we're fans, but at 30 x trailing 12 EPS, we have 6 words for you: go easy on the buy trigger. Scale your purchases if you decide to get wet. If loan growth doesn't show a pulse until 1Q '07, the stock will take a nap in back half of 06 due to lower NIM (net interest margin). Don't let us keep you from putting this stock on your radar, though: ROE has improved after getting pounded in 03; insiders own over 27% of the shares outstanding; and the float is a miniscule 25 million. Chart-wise, we can't complain: it's prettier than Jessica Alba in a swimsuit.

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