Southern First Bancshares (NASDAQ: SFST) is making waves after Investor’s Business Daily (IBD) bumped up its SmartSelect Composite Rating from 94 to 96, which is a signal that the stock is outperforming 96% of all other publicly traded companies based on earnings, sales growth, margins, and price performance.
For a relatively thinly traded small-cap bank stock, this is no small feat.
The IBD SmartSelect Composite Rating is one of those quick-glance metrics traders love. A score of 96 means Southern First Bancshares is standing out against thousands of other stocks, not just in its sector, but across the whole market.
The upgrade is particularly meaningful because SFST isn’t a mega-cap bank like JPMorgan or Wells Fargo. It’s a regional player in the Southeast banking industry.
Seeing it lead the Banks–Southeast group is impressive, especially since rivals like First Community (FCCO) and Red River Bancshares (RRBI) also rank high but trail SFST’s momentum.
Behind the upgrade is a streak of blistering earnings growth.
In Q2, Southern First reported 119% year-over-year EPS growth, that’s more than doubling profits, three consecutive quarters of rising earnings, and a 24% revenue growth, steady with the previous quarter.
That kind of consistency is why SFST now carries an EPS Rating of 81, meaning it outpaces 81% of all companies in terms of earnings growth.
Even more telling is its Accumulation/Distribution Rating of A- signals heavy buying by institutional investors, mutual funds, pensions, and the like, over the past 13 weeks. When “big money” moves in, smaller traders often follow.
As exciting as the upgrade sounds, there are caveats. Southern First Bancshares is thinly traded, with average daily dollar volume under $8 million. That can mean higher volatility and wider bid-ask spreads.
Also, the stock is already extended beyond its proper buy zone, after clearing a cup-with-handle breakout at $40.09. At $44.81 (as of midday trading on Aug. 25), it is above the ideal entry point. So, buying now may carry more risk, especially if the broader market stumbles.
