HDFC Bank Ltd (HDB): Today's Featured Banking 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

HDFC Bank ( HDB) pushed the Banking industry lower today making it today's featured Banking laggard. The industry as a whole closed the day up 0.9%. By the end of trading, HDFC Bank fell $1.39 (-3.2%) to $41.73 on average volume. Throughout the day, 814,655 shares of HDFC Bank exchanged hands as compared to its average daily volume of 752,200 shares. The stock ranged in price between $41.59-$42.25 after having opened the day at $42.23 as compared to the previous trading day's close of $43.12. Other companies within the Banking industry that declined today were: Credit Suisse ( DOIL), down 10.4%, OptimumBank Holdings ( OPHC), down 6.2%, Central Federal ( CFBK), down 5.7% and Royal Bank of Scotland Group (The ( RBS), down 5.6%.
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HDFC Bank Limited, together with its subsidiaries, provides retail banking, wholesale banking, treasury, and other financial services to individual and business customers in India. HDFC Bank has a market cap of $33.3 billion and is part of the financial sector. The company has a P/E ratio of 34.3, above the S&P 500 P/E ratio of 17.7. Shares are up 5.9% year to date as of the close of trading on Thursday. Currently there are 2 analysts that rate HDFC Bank a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates HDFC Bank as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

On the positive front, First Financial Northwest ( FFNW), down 10.4%, Summit State Bank ( SSBI), down 8.9%, Parke Bancorp ( PKBK), down 8.6% and Southcoast Financial Corporation ( SOCB), down 7.8% , were all gainers within the banking industry with PNC Financial Services Group ( PNC) being today's featured banking industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the banking industry could consider KBW Bank ETF ( KBE) while those bearish on the banking industry could consider ProShares Short KBW Regional Bankng ( KRS).

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