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OFG Bancorp (OFG) Soars to a 52-Week High, Time to Cash Out?

Have you been paying attention to shares of OFG BancorpOFG ? Shares have been on the move with the stock up 5% over the past month. OFG hit a new 52-week high of $14.85 in the previous session. OFG Bancorp has gained 55.9% since the start of the year compared to the -1% move for the Finance sector and the 7.4% year-to-date return for its peer group.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on April 20, 2018, OFG Bancorp reported EPS of $0.29 versus the Zacks Consensus Estimate of $0.2.

For the current fiscal year, OFG Bancorp is expected to post earnings of $1.12 per share on $362.2 million in revenues. This represents a -15.79% change in EPS on a -5.4% change in revenues. For the next fiscal year, the company is expected to earn $1.29 per share on $365.4 million in revenues. This represents a year-over-year change of 15.18% and 0.88%, respectively.

Valuation Metrics

OFG Bancorp may be at a 52-week high right now, but what might the future hold for OFG? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

OFG Bancorp has a Value Score of A. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 13.1X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 6.8X versus its peer group's average of 15.6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

OFG Bancorp Price and Consensus

OFG Bancorp Price and Consensus | OFG Bancorp Quote

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, OFG Bancorp currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if OFG Bancorp passes the test. Thus, it seems as though OFG shares could still be poised for more gains ahead.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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