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I have 33 consecutive profitable trades of 15% or better. How is this possible? Every day there are hundreds of stocks setting new highs, no matter what happens in the overall market. Many of these stocks are still at very reasonable valuations. Afraid of buying stocks at their highs? Think of it this way: a new high is really a future floor for companies with solid financial underpinnings. Quantitative momentum modeling makes it easy to identify stocks that can continue this upward momentum trend. Why does this happen? It's really very simple..ask me about what investors and cows have in common. I am $$$ MR. MARKET $$$. I AM HUGE!!! Bring me your finest meats and cheeses. You can join in on the fun. Register for free and you'll be able to post messages on this forum and also receive emails when $$$ MR. MARKET $$$ makes his own trades. ($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
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  1. #1

    Default CSTR ==> The Pumpkin Winner

    ($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)

    It’s been a while since the Orange of Tennessee sang Rocky Top and won an SEC championship. In fact, they have not done so since 1998. There is a reason for that…they stink.



    But never mind all that, there are some awesome things happening in this state. Tennessee has had several nicknames, but the most popular is “The Volunteer State.” The nick- name originated during the War of 1812, when thousands of Tennesseans enlisted in response to Governor Willie Blount's call for volunteers. Tennessee is a landlocked state in the U.S. South. Its capital, centrally located Nashville, is the heart of the country-music scene, with the long-running Grand Ole Opry, the Country Music Hall of Fame and Museum and a legendary stretch of honky-tonks and dance halls. Memphis, in the far southwest, is the home of Elvis Presley’s Graceland, rock-and-roll pioneering Sun Studio and the blues clubs of Beale Street. Look at the demographics. The state population grew by 8.9% — exceeding the 7.4% national rate — and increased to 6.9 million residents in 2020 from 6.3 million reported in 2010. Nashville-Davidson County itself saw a 14.2% population boost, adding about 89,200 people through the decade and checking in at second-most populous in the state, the numbers show. Its suburbs saw a bigger percentage boost, with Williamson County increasing by 35.2%, or 64,500 people, and Rutherford County jumping up 30%, or about 78,900 people. Several other Middle Tennessee counties saw population increases that exceeded 20%.

    Put all of this together, and I see cash. When I see cash, I think of banks. Today I bought Capstar Financial (CSTR) at 22.42. I will sell it in 4 to 6 weeks at 25.90. Here’s why I like Capstar. First of all, I love the chart.



    CSTR stock is up 107% in the last 52 weeks, yet its PE is only 10.8. This is a tremendous value. On top of that, the stock pays a 1% dividend. This success story is backed by some awesome financial metrics. Profit margin is 34%. Return on Equity is 13%. Quarterly earnings growth is an astounding 75%. Even with all of this, the company trades at a dirt cheap price to book of 1.34.

    CapStar Financial Holdings, Inc. operates as the bank holding company for CapStar Bank that provides banking services to consumer and corporate customers located primarily in Tennessee, the United States. Its deposit products and services include demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, certificates of deposit, and CDARS reciprocal products. The company also provides commercial and consumer real estate, construction and land development, commercial and industrial, consumer, and other loans. In addition, it offers mortgage banking products and services; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals; and correspondent banking services to community banks. Further, the company provides telephone and online banking, direct deposit, mobile banking, safe deposit box, remote deposit, and cash management services for individuals, and small and medium sized businesses. CapStar Financial Holdings, Inc. was incorporated in 2015 and is headquartered in Nashville, Tennessee.

    The earnings tell the story. Capstar Financial (CSTR) delivered earnings and revenue surprises of 18.00% and 7.48%, respectively, for the quarter ended September 2021. Capstar Financial (CSTR) came out with quarterly earnings of $0.59 per share, beating the Zacks Consensus Estimate of $0.50 per share. This compares to earnings of $0.43 per share a year ago.

    At the end of the day, this little bank deserves a significantly more bullish stance as it is focused on growth in the key markets of Knoxville and Chattanooga. The Company announced the hiring of a team of nine experienced financial professionals to grow market share and serve clients in Chattanooga. Pardon me boy. The Company's average deposits totaled $2.73 billion in the third quarter of 2021, an increase of $70.0 million compared to June 30, 2021. We should all know by now that banks are very dependent on the local economy they serve, and Nashville is just rocking! The Company’s commercial loan pipeline remains strong, exceeding $400 million, presenting the Company a tremendous opportunity to utilize current excess liquidity and capital to grow revenue and net income. Its lending platform is outperforming its industry peers. This will, of course, translate into increased earnings, which of course will propel the stock price. As long as earnings continue to grow, the stock price can’t help but go up. The reason is that its PE is too low right now. The stock price hasn’t caught up to earnings yet. The CEO sees terrific investment opportunities in their core business that will remain a priority. Their loan pipelines continue at record levels and remain strong across all of our markets.

    Capstar is committed to a community banking strategy emphasizing growth through in-market relationship development. With this, they also remain committed to robust risk management on a forward-looking basis with external validation in periodic stress testing by partnering with quality external firms to assist them objectively. Translation = they are taking calculated risk in growing their portfolio, but are not being reckless. They have high quality loans which generate quality earnings. Their past dues have continued to reduce and they have continued to maintain them at acceptable levels for the last three quarters.

    Management believes that their outlook is very positive and strong. They could buy back stock if they wanted to, but are focused on growth since the returns are better for the shareholders. Capstar is building a capable organic team looking at 8 percent growth in Tennessee and the Chattanooga expansion will be a cherry on top. They are so bullish we are likely to see another dividend increase this coming spring.
    Ric Flair famously said, “And now we go to school!”. Here’s what the boss of Capstar, Timothy Schools, said: “Third quarter marks two milestone events as we report record earnings and announce our exciting Chattanooga expansion,” said Timothy K. Schools, President and Chief Executive Officer of CapStar. “Originating from twenty-four months of tremendous focus on strategic alignment and execution, our associates are delivering winning results, improved profitability, and enhanced growth. I could not be more proud of our team and nothing illustrates their efforts more than the positive trends of our four key drivers and recent recognition by Piper Sandler as one of their 2021 Sm-All Stars.”

    “In the summer of 2019, we established four clear strategic objectives: 1) enhance profitability and earnings consistency, 2) accelerate organic growth, 3) maintain sound risk management, and 4) execute disciplined capital allocation. Complimenting the first three objectives, we are rapidly expanding our customer-centric banking model in attractive, high-growth markets through the hiring of top-tier talent. At the outset of 2020, we expanded to Knoxville where our team’s loan commitments now exceed $150 million. This summer, we added one of Nashville’s highest volume mortgage loan originators. Today, we are thrilled to welcome Brian Paris and his former teammates, who are among Chattanooga’s banking leaders. As we speak with bankers across the state, CapStar’s capabilities, size, customer responsiveness, and flexibility are attractive to high-quality talent seeking an organization where they can better serve their customers and have a greater relative impact.”

    “As we plan for the new year, I am very encouraged by CapStar’s positioning and prospects to become one of Tennessee’s great banks. Tennessee’s fifth largest bank by assets, CapStar is leveraging the inherent advantage of operating in one of the best states in the nation to do business and live, has strategically positioned itself in three of the Southeast’s most dynamic markets where population and household income are growing faster than national averages, has one of the industry’s youngest and most experienced management teams, and is executing a focused business model that produces strong financial results. Having significant excess liquidity and capital, we are focused on strategic initiatives that take advantage of market opportunities to significantly improve our return on tangible equity, earnings per share, and book value per share over time.”

    I am ready to take Capstar to the pay window. You? YOU YOU???!!! I am HUGE!

    $$$MR. MARKET$$$
    Last edited by mrmarket; 11-17-2021 at 09:24 PM.
    =============================

    I am HUGE! Bring me your finest meats and cheeses.

    - $$$MR. MARKET$$$

  2. #2
    Join Date
    Oct 2003
    Location
    Hamilton MA
    Posts
    2,151

    Default

    Outstanding pick, Large Person. Bonne chance.

  3. #3
    Join Date
    Sep 2003
    Posts
    4,952

    Default

    Great pick, and awesome writeup, $$MM!! I'm in with you at 22.2!

    I love how we're taking a page out of Patton's book with this one:

    https://quotesfromthepast.com/famous...eneral-patton/

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