Which Companies Are Dragging Down the Market?
As of March, all three major indices were trading up and the financial sector was up 0.2%. We noticed three stocks pushing that sector lower, two insurance companies and one bank (all of which are currently rated a “buy”).
Prudential Financial (PRU)
Prudential Financial provides investment management, insurance, and other financial services in the US and around the globe. The company’s current market cap is $31.6 billion.
As of noon trading, PRU was down 1.1% on light volume with only 1.2 million shares exchanged compared to the average daily volume of 3.4 million.
The stock varied between $70.33 and $70.66 after opening the day at $71.60, a 59¢ increase when compared to the previous day’s close.
Compared to last March, shares are down 11.6%.
Most analysts recommend PRU stock as a “buy” and a few consider it a “hold.” Prudential’s strengths are evident in several areas, such as its noticeable growth in net income, attractive valuation levels, and notable return on equity.
However, one can also see weaknesses including a disappointing performance in the stock itself, weak operating cash flow, and poor profit margins.
MetLife (MET)
With 90 million customers in 60 countries, MetLife is one of the world’s largest providers of insurance, asset management, employee benefit programs, and annuities. The company’s current market cap is $46.4 billion.
As of noon trading (Mar. 29th), MET was down 1.5% on light volume with only 1.9 million shares exchanged compared to the average daily volume of 8.1 million.
The stock varied between $42.03 and $42.68 after opening the day at $42.68, a 32¢ decrease when compared to the previous day’s close.
Compared to last March, shares are down 10.8%.
Similar to Prudential, most analysts recommend MET stock as a “buy” and a few consider it a “hold.” MetLife’s strengths include a solid financial position (with reasonable debt levels) and attractive valuation levels.
Analysts are divided on whether or not these strengths make up for the company’s sub par growth in net income.
PNC Financial Services Group, Inc. (PNC)
With PNC we move from the insurance industry to the banking industry. PNC is a diversified financial services company operating within the US. The company’s current market cap is $42.5 billion.
As of noon trading (Mar. 29th), PNC was down 0.8% on light volume with only 881,724 shares exchanged compared to the average daily volume of 2.7 million.
The stock varied between $83.46 and $84.66 after opening the day at $84.35, a 53¢ decrease when compared to the previous day’s close.
Compared to last March, shares are down 10.9%.
There is one lone analyst recommending PNC stock a “sell,” while the others consider it a solid “buy” and “hold.”
PNC shows good cash flow from operations, revenue growth, expanding profit margins, and growth in earnings per share. Weaknesses include lackluster stock performance.
If you’re interested in one of the three above stocks, you may want to look into ETFs. Bullish investors should consider Financial Select Sector SPDR (XLF) and bearish investors should consider Proshares Short Financials (SEF).
