Fact based stock research
TowneBank (NasdaqGS:TOWN)

US89214P1093

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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TowneBank stock research in summary

townebank.com

ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), TowneBank (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of TowneBank are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives). But they show above-average growth (Growth Rank of 61) and are safely financed (Safety Rank of 65, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on TowneBank's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company TowneBank exhibits low value (Obermatt Value Rank of 11), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 61). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 65) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	11
Growth Rank	61
Safety Rank	65
Combined Rank	19

Country	USA
Industry	Regional Banks
Index	NASDAQ
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: TowneBank

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	66	17	10	11
GROWTH
GROWTH	65	39	41	61
SAFETY
SAFETY	24	59	69	65
SENTIMENT
SENTIMENT	n/a	35	65	^new
360° VIEW
360° VIEW	n/a	11	30	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better TowneBank is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	66	17	10	11
GROWTH
GROWTH	65	39	41	61
SAFETY
SAFETY	24	59	69	65
COMBINED
COMBINED	51	13	12	19

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of TowneBank the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), TowneBank shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for TowneBank. Price-to-Sales is 37 which means that the stock price compared with what market professionals expect for future profits is higher than 63% of comparable companies, indicating a low value concerning TowneBank's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 31, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of TowneBank. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 25 and Dividend Yield, which is lower than 55% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a sell recommendation based on TowneBank's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for TowneBank? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as TowneBank? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. TowneBank may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	62	46	34	37
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	65	21	9	25
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	57	32	27	31
DIVIDEND YIELD
DIVIDEND YIELD	53	39	40	45
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	66	17	10	11

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of TowneBank; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), TowneBank shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for TowneBank. Sales Growth has a rank of 82, which means that, currently, professionals expect the company to grow more than 82% of its competitors. Profit Growth with a rank of 59 is also above average. But Capital Growth has only a rank of 49, and Stock Returns with 41 are also below-average. Stock returns for TowneBank have recently been below 59% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for TowneBank. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	62	10	44	82
PROFIT GROWTH
PROFIT GROWTH	35	47	35	59
CAPITAL GROWTH
CAPITAL GROWTH	n/a	52	51	49
STOCK RETURNS
STOCK RETURNS	69	69	59	41
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	65	39	41	61

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of TowneBank.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company TowneBank has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of TowneBank is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for TowneBank. Refinancing is at 79, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 79% of its competitors. Liquidity is also good at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 42, which means the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), TowneBank has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and TowneBank could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with TowneBank and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	20	18	36	42
REFINANCING
REFINANCING	39	85	73	79
LIQUIDITY
LIQUIDITY	49	60	72	56
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	24	59	69	65

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of TowneBank and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	12	55	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	49	54	^new
MARKET PULSE
MARKET PULSE	n/a	70	67	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	35	65	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for TowneBank.
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