Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.

Franklin Financial Network, Inc. (FSB-N) is a financial holding company. Through its bank subsidiary, Franklin Synergy Bank, a commercial bank, the company provides a range of banking and related financial services.

FSB's price/earnings ratio of 15.7, based on trailing 12-month earnings, is favoured by the Martin Zweig-based model. That model also likes FSB's revenue growth in relation to EPS growth. FSB's revenue growth is 38.36 per cent, while its earnings growth rate is 20.19 per cent, based on the average of the 3-, 4- and 5-year historical EPS growth rates.

Story continues below advertisement

FSB passes the equity/assets test within the Peter Lynch-inspired model with a healthy ratio of 8.00 per cent. The Lynch model also likes the company's return on assets of 1.05 per cent.

Franklin Financial gets interest from the Motley Fool-based model for its profit margin. This methodology seeks companies with a minimum trailing 12-month after-tax profit margin of 7 per cent. FSB's profit margin is 26.30 per cent.

The Motley Fool model also likes FSB's profit margin consistency, as it has been increasing over the past three years.

FSB is a constituent with Validea's Top Five Gurus portfolio. This model selects stocks using five of Validea's strategies with the best risk-adjusted returns. Twenty per cent of the portfolio is selected using each strategy.

Story continues below advertisement

FSB is a small cap stock and likely to display more volatility (risk) than the average stock and the overall market.

Click here for a complete breakdown of Validea's investing guru report.

Globe app users click here.

Read other research reports here.