Company Description
Headquartered in Kalispell, Montana, Glacier Bancorp, Inc.
conducts business from Glacier Bank of Kalispell, First Security
Bank of Missoula, Glacier Bank of Whitefish, Valley Bank of
Helena, Big Sky Western Bank of Bozeman, Western Security Bank of
Billings, all located in Montana, and Mountain West Bank located
in Idaho with two branches in Utah and two in Washington.
(Source: Company Press Release)
[Source: Company Press Release]
Reasons to Invest:
This week's DOTW is Glacier Bancorp, Inc (NASDAQ: GBCI). Despite
a relatively low paying dividend, I am forecasting a hypothetical
rise in GBCI's stock of ten points over the next several months.
A ten-point rise would register a rough return of 20%-25% for the
stock, and as you know I am happy with an annual return of 10%.
Let's get started... Over the first half of 2004, interest
income for GBCI rose by 11%, and net interest (after a loan loss
provision) rose a whopping 20%. This holding company is
prospecting more of the same in the coming quarters and this
bodes well for my hypothetical prospectus. Furthermore,
Greenspan is most likely going to raise interest rates at the
quarter point "measured pace," during Tuesday's FOMC meeting.
While rate hikes may be seen as detrimental to the markets
recovery, people are still going to be buying houses and taking
out loans, which serves well for the banking industry, as
increased rates generally means more interest.
As far as news surrounding the company goes, I don't see much new
developments taking shape in the near future. Perhaps the
company is focusing on staying in-line, or beating their earnings
estimates for the next quarter. I'll leave the speculation up to
you.
The fact that GBCI has outperformed nearly two thirds of its
industry over the past 13-weeks is something else to consider
when initiating the DRIP. On top of that, I cannot overlook
Glacier's earnings per share (EPS) growth rate forecast of 14.73
percent over the next year.
The 3-year forecast for GBCI shows a sales percentage growth rate
of 18.39, EPS growth rate of 20.63 percent and dividend
percentage growth rate of 11.82 percent. What does this mean?
The general rule of thumb is that DRIP investors want to see EPS
growth at the highest percentage. If EPS is growing more rapidly
than Dividends (and it is), then the chances of the Dividend
growing is much higher. If EPS is growing faster than sales, it
means that costs are being controlled. The fact that GBCI has a
sales rate of 18.39 percent over the next three years means that
GBCI is doing what they can to maintain a healthy rate of sales
growth, which bodes well for the long-term investor, such as our
selves.
Over the past 52-weeks GBCI has seen its stock grow by a margin
of 29.86 percent, as the company gained approximately ten points
in the past 12-months. If you asked me, I would be thrilled with
a year-over-year return of 30 percent, especially for a stock
that trades on volume of under 100K on a daily basis.
Ready for a little Technical Analysis? A quick look at the daily
chart and I recognize a late 2002 ascending regression channel
which has served as support/resistance for the stock for nearly
two-years now. Up until April and May of this year the bottom
bar of this channel was never even tested. However, when the
bottom bar was tested, the stock consolidated marginally higher
for the next month or so before setting a new 52-week at the end
of May. In August of this year, shares bottomed out of their
channel again, and retested its 200-DMA. Once shares touched
this moving average they reversed their bearish trend, and have
spent the past six weeks on a bullish rampage. The recent
bullish sentiment has sent GBCI to a new all time high (30.35),
and this could mean that the overextended stock is ready for a
little profit taking in the next few weeks. The MACD on the
daily chart has been on a buy signal for nearly two months, but
it appears that the Stochastics indicator is on the verge of a
bearish crossover.
In terms of the weekly chart, this past week of trading
registered the first week of losses for the stock in the past six
weeks. This is to be expected, especially since the stock just
set a new 52-week high last week, and since the stock has been
trending higher for five week's now. The weekly MACD and
Stochastics indicators are both currently giving off buy signals.
Since January of 2001, 32 of the past 43 months have been in the
green. On that note, I am going to put a low risk rating on this
DRIP plan, as I see practically no real catalyst for future loses
on the long-term horizon, especially since there is no overhead
resistance to lower GBCI's proverbial glass ceiling. As you
know, it's anyone's guess.
Glacier Bancorp offers an annual dividend of $0.68/share owned,
which tallies out to a 2.26 percent dividend yield.
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Remember:
Plan your trade, and trade your plan.
Until Next Week,
Nich Sheldon
Editor In Chief
www.dripadvisor.com
questions@DripAdvisor.com
Broker Recommendations
Strong Buy 0
Buy 1
Hold 3
Sell 0
Strong Sell 0
Brokers Covering 4
DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: Yes
Temper Enrollment: Yes
Min/Max Investment = $100-$2,000/quarter
Reinvestment Fees -
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: N/A
Transfer Agent:
Davidson Trust Co.
800-634-5526
Corporate Headquarters:
49 Commons Loop
Kalispell, MT 59901
Phone: (406) 756-4200
Fax: (406) 756-3518
Email: glacier@glacierbank.com
