Promising penny stocks: MainSource Financial Group Inc. (NASDAQ: MSFG), Cathay General Bancorp (NASDAQ: CATY)
MainSource Financial Group Inc. (NASDAQ: MSFG) continued to accelerate up after Thursday’s promising quarterly report. Retaining heavy volume the stock has already advanced some 20% and there’s a good chance of it continuing up as the volume indicates a healthy interest in this stock.
A press release containing unaudited year end results explained the heavy adverse effects of goodwill impairment and stated the company would have booked over $7 million profit excluding the intangible expenses.
Knowing they haven’t directly lost any cash on goodwill impairment it leaves the company with 138% year over year bottom line improvement. An impressive improvement should continue affecting the share price for the better.[BANNER]
Another financial sector player, Cathay General Bancorp (NASDAQ: CATY) failed to stand up to expectations with significantly increased net loss ($35.3 million lost in Q4) under 0.7% lower interest income and 45.5% increase in non-interest expense which rose to $52.7 million. Loan loss provision cost of $91 million also came in far above the year ago figure of $62.9 million.
Despite the beaten down performanc, there were also significant positive developments revealed which somewhat offset the bad news.
The bank has strengthened their capital position by raising $88.7 million through stock sale in the fourth quarter. Throughout the year they have witnessed nearly 10% increase in deposits to $7.5 billion over the year. Core deposits have increased by 20% to $3.2 billion.
The additional funds will help in dealing with problematic assets and increased deposits promise improved interest income. Non-performing loan provision costs should be expected to fall with the economic recovery in place.
On the market performance – with previously strong uptrend in place, the current dip might prove to be a good chance to get some cheaper stock.
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