Latest news with #FRME
Yahoo
10 hours ago
- Business
- Yahoo
3 Reasons FRME is Risky and 1 Stock to Buy Instead
Over the past six months, First Merchants's stock price fell to $35.72. Shareholders have lost 11.5% of their capital, which is disappointing considering the S&P 500 has climbed by 1.9%. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation. Is there a buying opportunity in First Merchants, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it's free. Despite the more favorable entry price, we don't have much confidence in First Merchants. Here are three reasons why FRME doesn't excite us and a stock we'd rather own. We at StockStory place the most emphasis on long-term growth, but within financials, a stretched historical view may miss recent interest rate changes, market returns, and industry trends. First Merchants's recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 2% over the last two years. Net interest margin represents how much a bank earns in relation to its outstanding loans. It's one of the most important metrics to track because it shows how a bank's loans are performing and whether it has the ability to command higher premiums for its services. Over the past two years, First Merchants's net interest margin averaged 3.2%. Its margin also contracted by 26.7 basis points (100 basis points = 1 percentage point) over that period. This decline was a headwind for its net interest income. While prevailing rates are a major determinant of net interest margin changes over time, the decline could mean First Merchants either faced competition for loans and deposits or experienced a negative mix shift in its balance sheet composition. Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions. First Merchants's EPS grew at an unimpressive 1.9% compounded annual growth rate over the last five years, lower than its 7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded. First Merchants isn't a terrible business, but it doesn't pass our bar. Following the recent decline, the stock trades at 0.8× forward P/B (or $35.72 per share). Beauty is in the eye of the beholder, but we don't really see a big opportunity at the moment. We're pretty confident there are more exciting stocks to buy at the moment. We'd suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
21-05-2025
- Business
- Yahoo
First Merchants Corporation (FRME): A Bull Case Theory
We came across a bullish thesis on First Merchants Corporation (FRME) on Substack by Serhio MaxDividends. In this article, we will summarize the bulls' thesis on FRME. First Merchants Corporation (FRME)'s share was trading at $39.18 as of May 20th. FRME's trailing and forward P/E were 11.04 and 11.07 respectively according to Yahoo Finance. An aerial view of a bustling regional banking institution. First Merchants Corp. (FRME), a $2.16 billion regional bank headquartered in Muncie, Indiana, recently increased its quarterly dividend by 2.9% to $0.36 per share, reflecting a forward yield of 3.67%. In Q1 2025, the company reported net income of $54.9 million, or $0.94 EPS, up from $0.85 the previous year, supported by a growing loan book which expanded by $154.9 million (4.8% annualized). Total assets reached $18.4 billion despite a 1.6% decline in deposits, partly due to the sale of five Illinois branches. Net interest income was $130.3 million with a net interest margin of 3.22%. First Merchants also returned capital through $10 million in share repurchases and redeemed $30 million in subordinated debt. The bank maintains a strong CET1 capital ratio of 11.5% and an efficient cost structure with a 54.54% efficiency ratio. These results demonstrate solid financial health, consistent growth, and a shareholder-friendly approach, making First Merchants an attractive regional banking investment. Also, check out what we found about this Texas-based regional bank - Cullenost Bankers Inc. First Merchants Corporation (FRME) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held FRME at the end of the fourth quarter which was 13 in the previous quarter. While we acknowledge the risk and potential of FRME as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FRME but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
First Merchants Corporation (FRME): A Bull Case Theory
We came across a bullish thesis on First Merchants Corporation (FRME) on Substack by Serhio MaxDividends. In this article, we will summarize the bulls' thesis on FRME. First Merchants Corporation (FRME)'s share was trading at $39.18 as of May 20th. FRME's trailing and forward P/E were 11.04 and 11.07 respectively according to Yahoo Finance. An aerial view of a bustling regional banking institution. First Merchants Corp. (FRME), a $2.16 billion regional bank headquartered in Muncie, Indiana, recently increased its quarterly dividend by 2.9% to $0.36 per share, reflecting a forward yield of 3.67%. In Q1 2025, the company reported net income of $54.9 million, or $0.94 EPS, up from $0.85 the previous year, supported by a growing loan book which expanded by $154.9 million (4.8% annualized). Total assets reached $18.4 billion despite a 1.6% decline in deposits, partly due to the sale of five Illinois branches. Net interest income was $130.3 million with a net interest margin of 3.22%. First Merchants also returned capital through $10 million in share repurchases and redeemed $30 million in subordinated debt. The bank maintains a strong CET1 capital ratio of 11.5% and an efficient cost structure with a 54.54% efficiency ratio. These results demonstrate solid financial health, consistent growth, and a shareholder-friendly approach, making First Merchants an attractive regional banking investment. Also, check out what we found about this Texas-based regional bank - Cullenost Bankers Inc. First Merchants Corporation (FRME) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held FRME at the end of the fourth quarter which was 13 in the previous quarter. While we acknowledge the risk and potential of FRME as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FRME but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
