Principal Financial Group (PFG): Today's Featured Financial Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Principal Financial Group ( PFG) pushed the Financial Services industry lower today making it today's featured Financial Services laggard. The industry as a whole closed the day up 0.4%. By the end of trading, Principal Financial Group fell 52 cents (-1.9%) to $26.80 on heavy volume. Throughout the day, 3.3 million shares of Principal Financial Group exchanged hands as compared to its average daily volume of 1.8 million shares. The stock ranged in price between $26.15-$26.83 after having opened the day at $26.67 as compared to the previous trading day's close of $27.32. Other companies within the Financial Services industry that declined today were: China Ceramics ( CCCL), down 5.5%, Gleacher ( GLCH), down 4.6%, Medley Capital Corp BDC ( MCC), down 4.3%, and Ampal-American Israel Corporation ( AMPL), down 3.9%.
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Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services. Principal Financial Group has a market cap of $8.1 billion and is part of the financial sector. The company has a P/E ratio of 10.9, below the S&P 500 P/E ratio of 17.7. Shares are up 12.2% year to date as of the close of trading on Tuesday. Currently there are five analysts that rate Principal Financial Group a buy, one analyst rates it a sell, and eight rate it a hold.

TheStreet Ratings rates Principal Financial Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, Knight Capital Group ( KCG), up 15.2%, Asset Acceptance Capital Corporation ( AACC), up 8.8%, Siebert Financial Corporation ( SIEB), up 6.8%, and Investment Technology Group ( ITG), up 4.2%, were all gainers within the financial services industry with Morgan Stanley ( MS) being today's featured financial services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the financial services industry could consider Financial Select Sector SPDR ( XLF) while those bearish on the financial services industry could consider Proshares Short Financials ( SEF).

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