3 Stocks Pushing The Banking Industry Lower

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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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At the close, Southcoast Financial ( SOCB) was down $0.13 (1.8%) to $7.00 on average volume. Throughout the day, 5,888 shares of Southcoast Financial exchanged hands as compared to its average daily volume of 4,000 shares. The stock ranged in price between $6.88-$7.14 after having opened the day at $6.90 as compared to the previous trading day's close of $7.13.

Southcoast Financial Corporation operates as the holding company for Southcoast Community Bank that provides commercial banking services in South Carolina. Southcoast Financial has a market cap of $49.7 million and is part of the financial sector. Shares are up 22.9% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Southcoast Financial as a hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on SOCB go as follows:

  • SOUTHCOAST FINANCIAL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SOUTHCOAST FINANCIAL CORP increased its bottom line by earning $1.28 versus $0.49 in the prior year.
  • Compared to its closing price of one year ago, SOCB's share price has jumped by 27.91%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 89.9% when compared to the same quarter one year ago, falling from $7.04 million to $0.71 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Commercial Banks industry and the overall market, SOUTHCOAST FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Southcoast Financial Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Porter Bancorp ( PBIB) was another company that pushed the Banking industry lower today. Porter Bancorp was down $0.03 (3.1%) to $1.00 on light volume. Throughout the day, 6,524 shares of Porter Bancorp exchanged hands as compared to its average daily volume of 16,700 shares. The stock ranged in price between $1.00-$1.02 after having opened the day at $1.01 as compared to the previous trading day's close of $1.04.

Porter Bancorp, Inc. operates as the bank holding company for PBI Bank that provides commercial and personal banking products and services, and financial services in Central Kentucky and Louisville. Porter Bancorp has a market cap of $13.3 million and is part of the financial sector. Shares are up 2.7% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Porter Bancorp as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on PBIB go as follows:

  • PBIB's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 45.26%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • PBIB, with its decline in revenue, slightly underperformed the industry average of 8.2%. Since the same quarter one year prior, revenues fell by 16.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for PORTER BANCORP INC is currently very high, coming in at 77.04%. Regardless of PBIB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PBIB's net profit margin of 0.38% is significantly lower than the industry average.
  • PORTER BANCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, PORTER BANCORP INC continued to lose money by earning -$0.28 versus -$2.83 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 103.3% when compared to the same quarter one year prior, rising from -$1.31 million to $0.04 million.

You can view the full analysis from the report here: Porter Bancorp Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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