3 Stocks Pushing The Banking Industry Lower

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The Banking industry as a whole closed the day down 0.3% versus the S&P 500, which was down 0.9%. Laggards within the Banking industry included Bay Bancorp ( BYBK), down 3.5%, Porter Bancorp ( PBIB), down 3.1%, Cordia Bancorp ( BVA), down 1.8%, Citizens First ( CZFC), down 4.3% and Southcoast Financial ( SOCB), down 1.8%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Mitsubishi UFJ Financial Group ( MTU) is one of the companies that pushed the Banking industry lower today. Mitsubishi UFJ Financial Group was down $0.11 (1.9%) to $5.80 on light volume. Throughout the day, 887,380 shares of Mitsubishi UFJ Financial Group exchanged hands as compared to its average daily volume of 1,286,400 shares. The stock ranged in price between $5.79-$5.89 after having opened the day at $5.88 as compared to the previous trading day's close of $5.91.

Mitsubishi UFJ Financial Group, Inc., through its subsidiaries, provides financial services in Japan and internationally. Mitsubishi UFJ Financial Group has a market cap of $84.7 billion and is part of the financial sector. Shares are down 11.5% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate Mitsubishi UFJ Financial Group a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Mitsubishi UFJ Financial Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from TheStreet Ratings analysis on MTU go as follows:

  • The revenue growth greatly exceeded the industry average of 8.2%. Since the same quarter one year prior, revenues rose by 27.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for MITSUBISHI UFJ FINANCIAL GRP is currently very high, coming in at 89.62%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MTU's net profit margin of 15.43% significantly trails the industry average.
  • The share price of MITSUBISHI UFJ FINANCIAL GRP has not done very well: it is down 5.60% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Commercial Banks industry. The net income has significantly decreased by 27.8% when compared to the same quarter one year ago, falling from $2,909.43 million to $2,101.02 million.

You can view the full analysis from the report here: Mitsubishi UFJ Financial Group Ratings Report

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