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NEW YORK (
Financial sector stocks have underperformed the broader market year to date, which may be a good reason to beef up bets in the sector.
Financial Select Sector SPDR(XLF), a popular exchange traded fund that tracks financial stocks, was down 6.71% year to date through the close of trading Monday, versus a 4.33% gain for the Dow Jones Industrial Average.
If the sector rebounds, it is possible the biggest pop will come from stocks that are out of favor with analysts. Which financial stocks do the analysts like least? There is one ranking system to give you the answer.
Bloomberg assigns stocks a number from one to five based on each analyst's recommendation, then calculates the average to show how Wall Street analysts as a group rate a particular stock. A rating of five would mean every analyst that covers the stock loves it, while a rating of one means every analyst hates the stock.
TheStreet took a look at the 83 financial stocks in the S&P 500 to see how analysts rate them.
TheStreet took a look at the 83 financial stocks in the S&P 500 to see how analysts rate them. Though Bloomberg includes real estate investment trusts among financial stocks, we don not, so we eliminated
Weyerhaeuser(WY) which would have come in first. We also took out
Marshall & Ilsley(MI), since it has agreed to be acquired by
Bank of Montreal(BMO).
Keep in mind that analysts may recommend a stock even if they think the company is badly run, has poor growth prospects, or a bunch of bad loans sitting on its books that it isn't owning up to, as long as it's cheap enough.
Also remember that analysts tend to be bullish as a group, mostly because they are afraid putting a "sell" on a stock may cause management to shut them out of the information loop. Keeping that in mind, here are the
five financial stocks analysts hate.
Also, don't forget to take a look at
five financial stocks analysts love.
Assurant(AIZ - Get Report)Bloomberg analyst consensus rating: 3.0
This specialty insurer operates in North America and in "select" worldwide markets. It has four operating segments: Assurant Solutions, Assurant Specialty Property, Assurant Health, and Assurant Employee Benefits which provide debt protection administration, credit-related insurance, warranties and service contracts, pre-funded funeral insurance, lender-placed homeowners insurance, manufactured housing homeowners insurance, individual health and small employer group health insurance, group dental insurance, group disability insurance, and group life insurance, according to Assurant's 10-K.
Its earnings per share and overall net income have declined every year since at least 2006, when it earned just over $717 million or $5.65 per share. In 2010, it earned roughly $279 million, or $2.52 per share.
Sterne Agee analyst John Nadel has a "neutral" rating on the stock and a $43 price target on the stock, which was at $35.53 mid-Tuesday.
"While we continue to believe downside risk is relatively limited given [tangible book value per share at roughly] $35, we nonetheless are not finding sufficient upside to recommend investors buy the stock," Nadel wrote in a March 30 note.