What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Regional Banks company The Bancorp (NASDAQ:TBBK) jumped 7.5%. Is now the time to buy The Bancorp? Access our full analysis report here, it’s free.
- Regional Banks company ServisFirst Bancshares (NYSE:SFBS) jumped 6.4%. Is now the time to buy ServisFirst Bancshares? Access our full analysis report here, it’s free.
- Regional Banks company Seacoast Banking (NASDAQ:SBCF) jumped 5.6%. Is now the time to buy Seacoast Banking? Access our full analysis report here, it’s free.
- Regional Banks company Renasant (NYSE:RNST) jumped 5.8%. Is now the time to buy Renasant? Access our full analysis report here, it’s free.
- Regional Banks company Provident Financial Services (NYSE:PFS) jumped 5.5%. Is now the time to buy Provident Financial Services? Access our full analysis report here, it’s free.
Zooming In On The Bancorp (TBBK)
The Bancorp’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 3.9% after an upgrade from financial services firm Raymond James, which raised its rating on the stock to “Strong Buy” from “Outperform.”. The financial services firm also increased its price target on the stock to $76 from $71. The upgrade is based on optimism around the company's focus on its fintech strategy, particularly its plan to expand its share of business with key partners like Chime and PayPal. According to the analyst note from Raymond James, this strategy is expected to enhance profitability while simultaneously de-risking the company's balance sheet by shifting its loan portfolio towards credit sponsorship fintech loans. The firm also noted that market concerns regarding The Bancorp's Real Estate Bridge Lending are likely “overblown.” The positive analyst action follows other recent good news, including a credit rating upgrade from Kroll Bond Rating Agency (KBRA) the previous week.
The Bancorp is up 39.8% since the beginning of the year, and at $72.28 per share, has set a new 52-week high. Investors who bought $1,000 worth of The Bancorp’s shares 5 years ago would now be looking at an investment worth $7,710.
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