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Company name Old National Bancorp
Stock ticker ONB
Live stock price [stckqut]ONB[/stckqut]
P/E compared to competitors Fair
MANAGEMENT EXECUTION
Employee productivity Poor
Sales growth Fair
EPS growth Poor
P/E growth Good
EBIT growth Poor
ANALYSIS
Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $13.29
Target stock price (averages with growth) $13.36
Target stock price (averages with no growth) $9.9
Target stock price (manual assumptions) $11.09

“Old National Bancorp (Old National) is a financial holding company. Old
National, through its wholly owned banking subsidiary, Old National Bank,
provides a range of services, including commercial and consumer loan and
depository services, investment and brokerage services, lease financing and
other traditional banking services. Through its non-bank affiliates, it
provides services to supplement the banking business, including fiduciary
and wealth management services, insurance and other financial services. The
Company provides financial services primarily in Indiana, eastern and
southeastern Illinois, and central and western Kentucky. Old National
operates in two segments: community banking and treasury. ”

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock.

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This is a series of articles describing how to quickly understand the key aspects of the annual report from a company that you have invested in with your hard earned money. This series started with an overview post on November 30, 2010.

6. Shares outstanding and Stock repurchase

You will almost definitely need to search for these terms in order to read about this information. The discussion will likely be buried in the report and not obvious in the Table of Contents.

You need to understand why the shares outstanding changed. Did the company buy back a lot of shares via a stock repurchase plan? Did they issue more shares?

There is no right answer for this metric but you need to understand what happened and you need to be comfortable with the reason. Was this change in your long-term best interest even if it hurt you in the short term? You definitely want to make sure that the company is not changing this number to hide some other shortcoming.

While stock repurchasing is a way to increase the stock price of the company, it generally means that the company is using its own cash to buy its stock. This means that the company isn’t using its money to pay for long-term assets or revenue producing assets. Do you really like the idea that the company is putting $5,000,000 into its own stock rather than spend that money on better marketing or more product development?

Here are the links to all 9 posts of the series:

  1. The 7 critical items to read first in an annual report in 20 minutes (Part 1 of 9)
  2. The 7 critical items to read first in an annual report in 20 minutes (Part 2 of 9)
  3. The 7 critical items to read first in an annual report in 20 minutes (Part 3 of 9)
  4. The 7 critical items to read first in an annual report in 20 minutes (Part 4 of 9)
  5. The 7 critical items to read first in an annual report in 20 minutes (Part 5 of 9)
  6. The 7 critical items to read first in an annual report in 20 minutes (Part 6 of 9)
  7. The 7 critical items to read first in an annual report in 20 minutes (Part 7 of 9)
  8. The 7 critical items to read first in an annual report in 20 minutes (Part 8 of 9)
  9. The 7 critical items to read first in an annual report in 20 minutes (Part 9 of 9)

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Company name IBERIABANK Corporation
Stock ticker IBKC
Live stock price [stckqut]IBKC[/stckqut]
P/E compared to competitors Good
MANAGEMENT EXECUTION
Employee productivity Fair
Sales growth Good
EPS growth Good
P/E growth Good
EBIT growth Good
ANALYSIS
Confident Investor Rating Good
Target stock price (TWCA growth scenario) $91
Target stock price (averages with growth) $118.3
Target stock price (averages with no growth) $95.77
Target stock price (manual assumptions) $73.4

“IBERIABANK Corporation (IBERIABANK) is a multi-bank financial holding
company with 209 combined offices, including 136 bank branch offices in
Louisiana, Arkansas, Florida, Alabama, Tennessee, and Texas, 26 title
insurance offices in Arkansas and Louisiana, and mortgage representatives in
47 locations in 12 states. The Company is the holding company for
IBERIABANK, a Louisiana banking corporation, Louisiana; IBERIABANK fsb, a
federal savings bank; Lenders Title Company, an Arkansas-chartered title
insurance and closing services agency and IBERIA Capital Partners LLC, a
corporate finance services firm in formation. The Company offers traditional
commercial bank products and services to its clients. These products and
services include a an array of commercial, consumer, mortgage, and private
banking products and services, cash management, deposit and annuity
products, and investment brokerage services. ”

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.

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This is a series of articles describing how to quickly understand the key aspects of the annual report from a company that you have invested in with your hard earned money. This series started with an overview post on November 30, 2010.

5. Backlog

Some companies will have a backlog of orders. The easiest way to find this discussion is by searching for ‘backlog’ using your browser or reader.

Having a backlog is not necessarily a bad thing. In fact, it is sometimes a great thing as it shows that customers really want the company’s products and they are willing to wait for them. It also may show that revenue growth is being controlled to flatten out peaks and valleys – this is often a good thing.

Backlog often means that customers are buying faster than the company can process and ship the product. If the company is cyclical in its orders than perhaps they have decided to only have a certain number of personnel shipping orders. If that capacity is exceeded occasionally then the customer will have to wait. This often means that the company is able to control costs.

It is possible though that backlog that continues to grow from year to year is a bad thing. This could be a sign that your company is sacrificing customer satisfaction for cost controls and they are not staffing correctly.

Changes to backlog relative to the size of the company should cause concern. Something has changed in the operations of the company if this number doesn’t stay relatively static. Make sure you are comfortable with the company’s description of the change.

Here are the links to all 9 posts of the series:

  1. The 7 critical items to read first in an annual report in 20 minutes (Part 1 of 9)
  2. The 7 critical items to read first in an annual report in 20 minutes (Part 2 of 9)
  3. The 7 critical items to read first in an annual report in 20 minutes (Part 3 of 9)
  4. The 7 critical items to read first in an annual report in 20 minutes (Part 4 of 9)
  5. The 7 critical items to read first in an annual report in 20 minutes (Part 5 of 9)
  6. The 7 critical items to read first in an annual report in 20 minutes (Part 6 of 9)
  7. The 7 critical items to read first in an annual report in 20 minutes (Part 7 of 9)
  8. The 7 critical items to read first in an annual report in 20 minutes (Part 8 of 9)
  9. The 7 critical items to read first in an annual report in 20 minutes (Part 9 of 9)

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In: Commentary
With: 0 Comments

This is a series of articles describing how to quickly understand the key aspects of the annual report from a company that you have invested in with your hard earned money. This series started with an overview post on November 30, 2010.

4. DSO

DSO stands for Days Sales Outstanding. Not all companies will report DSO but if they do, you can usually find it by searching for ‘DSO’, ‘Days Sales’, or ‘Receivables’ in your reader or browser.

In nearly every case, you just want to make sure that this number doesn’t get dramatically larger than it was previously. DSO that is increasing means that the company’s customers are, on average, taking longer to pay for their purchases. This means that your company’s cash is being tied up paying bills and salaries while the check is in the mail from the customers.

You want your company to constantly be working to shrink the DSO metric. A large and increasing DSO can mean that the company is hiding something bad and it is heading into trouble. You may want to liquidate your holdings if the DSO is going up dramatically and you don’t think it is for a good reason.

In general, it is an excellent combination if revenue (sales) and net profit are going up at 10% and the DSO is decreasing.

Here are the links to all 9 posts of the series:

  1. The 7 critical items to read first in an annual report in 20 minutes (Part 1 of 9)
  2. The 7 critical items to read first in an annual report in 20 minutes (Part 2 of 9)
  3. The 7 critical items to read first in an annual report in 20 minutes (Part 3 of 9)
  4. The 7 critical items to read first in an annual report in 20 minutes (Part 4 of 9)
  5. The 7 critical items to read first in an annual report in 20 minutes (Part 5 of 9)
  6. The 7 critical items to read first in an annual report in 20 minutes (Part 6 of 9)
  7. The 7 critical items to read first in an annual report in 20 minutes (Part 7 of 9)
  8. The 7 critical items to read first in an annual report in 20 minutes (Part 8 of 9)
  9. The 7 critical items to read first in an annual report in 20 minutes (Part 9 of 9)