Home Bancshares Story

HOMB -- USA Stock

USD 25.20 0.60 2.33%

Macroaxis Story

Home BancShares is scheduled to announce its earnings today. The next earnings report is expected on the 15th of April 2021. Home BancShares Average Equity is projected to increase significantly based on the last few years of reporting. The past year's Average Equity was at 2.81 Billion. The current year Calculated Tax Rate is expected to grow to 34.89, whereas Net Income Per Employee is forecasted to decline to about 109.3 K. As many passive investors are finally getting excited about financial services space, Home BancShares could be a good starting point. We will check if the company can maintain a respectable level of debt while minimizing operating losses.

Published over a month ago

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How much will Home BancShares owe in February?

The company currently holds 975.93 M in liabilities with Debt to Equity (D/E) ratio of 6.74, indicating Home BancShares may have difficulties to generate enough cash to satisfy its financial obligations. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Home BancShares has an asset utilization ratio of 6.11 percent. This suggests that the company is making $0.0611 for each dollar of assets. An increasing asset utilization means that Home BancShares is more efficient with each dollar of assets it utilizes for everyday operations.

Home Bancshares financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Home Bancshares, including all of Home Bancshares's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Home Bancshares assets, the company is considered highly leveraged. Understanding the composition and structure of overall Home Bancshares debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.

Please read more on our technical analysis page.

Understanding Home Bancshares Total Debt

Home Bancshares liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Home Bancshares has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Home Bancshares balance sheet include debt obligations and money owed to different Home Bancshares vendors, workers, and loan providers. Below is the chart of Home Bancshares main long-term debt accounts currently reported on its balance sheet.

You can use Home Bancshares financial leverage analysis tool to get a better grip on understanding its financial position

How important is Home Bancshares's Liquidity

Home Bancshares financial leverage refers to using borrowed capital as a funding source to finance Home Bancshares ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Home Bancshares financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Home Bancshares's total debt and its cash.

Acquisition by John Allison of 100000 shares of Home Bancshares subject to Rule 16b-3

Legal trades by Home Bancshares insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:

Home Bancshares insider trading alert for grant of common stock - performance based by John Allison, Chairman & CEO, on 4th of March 2021. This event was filed by Home Bancshares Inc with SEC on 2021-03-04. Statement of changes in beneficial ownership - SEC Form 4. John Allison currently serves as founder, chairman, member of asset/liability committee, chairman of centennial bank, director of community bank, director of bank of mountain view, director of marine bank, director of first state bank and director of twin city bank of Home Bancshares [view details]

Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down

The current rise in Home BancShares short term price appreciation may raise some interest from investors. The stock closed today at a share price of 21.30 on 664,500 in trading volume. The company executives have successfully maneuvered the firm at convenient times to take advantage of all market conditions in December. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.23. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Home BancShares partners.

Asset Breakdown

	Total Assets	14.29 Billion
	Goodwill	1.23 Billion
	Tax Assets	59.82 Million

Home BancShares technical analysis suggests possible turnaround

The maximum drawdown is down to 18.33 as of today. Home BancShares currently demonstrates below-verage downside deviation. It has Information Ratio of 0.09 and Jensen Alpha of 0.18. However, we do advice investors to further question Home BancShares expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Final Take On Home BancShares

Whereas some other firms within the banks?regional industry are still a little expensive, even after the recent corrections, Home BancShares may offer a potential longer-term growth to investors. To conclude, as of the 21st of January 2021, our ongoing 30 days buy-or-sell advice on the company is Strong Buy. We believe Home BancShares is undervalued with below average probability of distress for the next two years.

About Contributor

Ellen Johnson is a Member of Macroaxs Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Home Bancshares. Please refer to our Terms of Use for any information regarding our disclosure principles.

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