Western Alliance Bancorporation (WAL) is a Las Vegas-based holding company with regional banks operating in Nevada, Arizona, and California. The bank offers retail banking services and focuses on mortgages for retail customers and commercial loans, mainly for real estate.
The company has been benefiting from an economic rebound. In its most recent quarter, the bank produced record net revenues, while expanding on net interest margin, generating the highest return on tangible common equity in the bank’s history and returning asset quality to pre-pandemic levels.
The company’s debt situation looks solid with a debt-to-equity ratio of 0.5. Earnings have grown an average of 25.9% per year over the past five years. Analysts forecast EPS to soar 62.5% year over year in the current quarter.
The stock appears undervalued as both its trailing and forward P/Es are around 12. The stock was showing bullish momentum from October to March, but performance has been mixed since.
Take a look at the 6-month chart of WAL below with added notations:
WAL has tested the $90 level (green) many times over the course of the past six months. The stock appears to be falling back down to that support again. A break of $90 could mean much lower prices for the stock.
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A trader could enter a short position on a break below $90 with a protective stop placed above the level.
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WAL shares were unchanged in premarket trading Monday. Year-to-date, WAL has gained 60.04%, versus a 19.78% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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