Carver Bancorp (Nasdaq: CARV) Stock Soars

The last few weeks in America have been full of civil unrest. But could civil unrest lead to some big profits on Wall Street? If you look at Carver Bancorp. (Nasdaq: CARV) stock, they already have.

Carver Bancorp. more than doubled its price on Wednesday. An increased interest in black-owned businesses spurred the price increase as Black Lives Matter protests continue in the United States.

What is Carver Bancorp. and why did the Black Lives Matter movement and the #BuyBlack hashtag cause its stock price to move so dramatically yesterday?

What Is Carver Bancorp. (Nasdaq: CARV) Stock?

Carver Bancorp. is the holding company for Carver Federal Savings Bank. It was founded in 1948. And its primary goal is to serve black communities.

Carver is the largest black-operated bank in the country. This banking company, headquartered in New York City, has also been designated by the U.S. Treasury Department as a Community Development Financial Institution.

The federally chartered bank provides both consumer and commercial banking services for retail consumers, commercial businesses as well as governments agencies.

The banking company provides a wide array of consumer and commercial products including CDs, IRAs, mortgages and construction loans.

Why Did Carver Bancorp’s Price Go Up So Much?

Some consumers are calling for people to “Buy Black” as a way to combat racial inequality. These calls are especially prominent on social media platforms like Twitter.

Carver Bancorp. stock’s price rose 248% on Wednesday from a close of $2.41 on Tuesday to a close of $8.39 on Wednesday. The stock rose as high as $18.45 on intraday trading before dropping down to its closing price.

You may have seen that #bandaid is FINALLY launching colors for black and brown people. What you may not know is that @browndages been selling them forever, is Black family-owned and operated. That’s who I buy from. Buy you Black band-aids from them. #GrabYourWallet #BuyBlack

— SUCH (@Such) June 13, 2020

The Dow Jones Industrial Average (DJIA) has been volatile over the past month. Both optimism and pessimism about COVID-19 has moved the market significantly. And now the Black Lives Matter protests have added to the mix, increasing risk.

But while many may feel that social unrest is bad for the market, it certainly can lead to some diamond in the rough gains. That’s exactly what we see here manifested in Carver Bancorp. stock.

Financials

Since the beginning of the year, the S&P 500 has seen a return of -3.63%. Meanwhile, Carver Bancorp. has returned 245%. That’s an amazing performance. But can the Harlem, New York based financial stock keep it up?

Unfortunately, to date the company’s financials have not looked good. Over the past three years, two have seen the bank operating with a negative net income (2018 was the exception).

The same is true with the firm’s net cash flows. Only 2018 saw a positive net cash flow in the past three years of $75.8 million. In 2019, the net cash flow was -$103.3 million.

But will the Black Lives Matter movement and #BuyBlack spur change and start to turn Carver Bancorp’s financial fortunes around? As more people become interested in racial justice issues, it’s certainly possible.

Concluding Thoughts

As Bob Dylan once sang, “The times they are a-changin”. Or, at the very least, they are unstable. But equilibrium tends to return. COVID-19 will not last forever and neither will the social unrest of the present moment.

To date, its hard to base a bet on Carver Bancorp. stock based on the company’s financial performance. But an increased interest in black-operated businesses and a culture-changing social movement certainly could boost this company’s stock performance more in the short term.

And in the long run?  Anything is possible. Which is why we will keep our eyes on Carver Bancorp. stock as a good stock to watch moving forward.

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