June 06, 2018: Trade-of-the-Week: Independent Bank Corporation (INDB)

By Tech_Spec
3-June-2018 10:45:29 PM

The NASDAQ index has been one of the best performing U.S. index over the past 12 months. Outperforming both the S&P 500 and the Dow.
The stock this week comes from the financial sector within that index.
Independent Bank Corporation (INDB) was founded over 100 hundred years ago (1907) and operates as a holding company for Rockland Trust Company. The bank has over 80 full service branches and more than a dozen commercial banking centers in the upper east coast. The company provides commercial banking products and services to individuals and small-to-medium sized businesses primarily in the Massachusetts area. The company’s products and services list covers the standard mix of financial offerings such as demand deposits, time certificates of deposit, as well as checking, money market, and savings accounts. The loan portfolio provides the lion’s share of the bank’s income. These products are commercial loans for real estate and construction, small business loans; consumer real estate loans, residential mortgages and home equity loans.

The fundamentals are also compelling. Here is a list of the key measures:

  • Trailing P/E: 24.98 Forward P/E: 17.10
  • EPS: 3.19 , Beta: 0.71 PEG: 2.21 , P/S: 6.47 , P/B: 2.32
  • Profit Margin: 25.73% Operating Margin: 41.61%
  • ROA: 1.10% ROE: 9.64%
  • Quarterly Earnings Growth: 28.40%  Yield: 2.09%

From a trading perspective, we feel the technicals are more significant. Here is some important elements:

  • Recently broke out of a 7-month consolidation
  • New 52-week high
  • New all-time high
  • Buying momentum (RSI) is positive and rising
  • Buying volume increased slightly in May
  • The 1st support level is at $75
  • We would suggest placing the safety stop is at $74
  • Our models indicate a target of $90.75

Suggested buying approach: Buy INDB at the current level. If the stock pulls back, as long as the price is above the safety stop, wait for confirmation of support and then decide if the position is to be increased. Always use a 3% trailing stop.

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Author: Tech_Spec

Canada’s only Master of Financial Technical Analysis (MFTA). This 4 – 5 year program offered by the International Federation of Technical Analysts (IFTA) in England is regarded as the global standard. • Instructor of Technical Analysis for the Canadian Securities Institute (CSI). My role is teaching market analysis to industry professionals. • Financial Technical Analyst offering 25 years experience in the financial and investment service industry. • Editor and owner of the Technicalspeculator.com, an on-line independent financial market research and newsletter website. • Registered Securities Advisor

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