3 Stocks Pushing The Financial Services Industry Lower

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The Financial Services industry as a whole closed the day down 0.2% versus the S&P 500, which was down 0.6%. Laggards within the Financial Services industry included Paulson Capital ( PLCC), down 7.0%, Siebert Financial ( SIEB), down 3.7%, Value Line ( VALU), down 1.6%, CIFC ( CIFC), down 1.7% and First Marblehead ( FMD), down 4.4%.

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

Raymond James Financial ( RJF) is one of the companies that pushed the Financial Services industry lower today. Raymond James Financial was down $0.90 (1.6%) to $54.41 on average volume. Throughout the day, 600,917 shares of Raymond James Financial exchanged hands as compared to its average daily volume of 595,500 shares. The stock ranged in price between $54.35-$55.35 after having opened the day at $55.01 as compared to the previous trading day's close of $55.31.

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, is engaged in the underwriting, distribution, trading, and brokerage of equity and debt securities, as well as the sale of mutual funds and other investment products in the United States, Canada, and Europe. Raymond James Financial has a market cap of $7.9 billion and is part of the financial sector. Shares are up 6.0% year-to-date as of the close of trading on Monday. Currently there are 3 analysts who rate Raymond James Financial a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Raymond James Financial as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from TheStreet Ratings analysis on RJF go as follows:

  • The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 9.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 44.06% and other important driving factors, this stock has surged by 26.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RJF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • RAYMOND JAMES FINANCIAL CORP has improved earnings per share by 44.1% 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 two years. We feel that this trend should continue. During the past fiscal year, RAYMOND JAMES FINANCIAL CORP increased its bottom line by earning $2.58 versus $2.20 in the prior year. This year, the market expects an improvement in earnings ($3.22 versus $2.58).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 46.3% when compared to the same quarter one year prior, rising from $83.86 million to $122.69 million.
  • Net operating cash flow has increased to $317.83 million or 34.00% when compared to the same quarter last year. In addition, RAYMOND JAMES FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -89.07%.

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

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At the close, First Marblehead ( FMD) was down $0.16 (4.4%) to $3.51 on average volume. Throughout the day, 51,763 shares of First Marblehead exchanged hands as compared to its average daily volume of 54,300 shares. The stock ranged in price between $3.43-$3.64 after having opened the day at $3.59 as compared to the previous trading day's close of $3.67.

The First Marblehead Corporation, a specialty finance company, together with its subsidiaries, provides loan programs on behalf of its lender clients for K-12, undergraduate, and graduate students, as well as for college graduates seeking to refinance private education loan obligations. First Marblehead has a market cap of $46.1 million and is part of the financial sector. Shares are down 50.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate First Marblehead a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates First Marblehead 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.

Highlights from TheStreet Ratings analysis on FMD go as follows:

  • FMD'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 49.08%, 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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Consumer Finance industry and the overall market, FIRST MARBLEHEAD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • FIRST MARBLEHEAD CORP has improved earnings per share by 43.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FIRST MARBLEHEAD CORP reported poor results of -$4.80 versus -$3.30 in the prior year. This year, the market expects an improvement in earnings (-$2.31 versus -$4.80).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 41.8% when compared to the same quarter one year prior, rising from -$8.79 million to -$5.11 million.
  • Net operating cash flow has significantly increased by 51.64% to -$5.10 million when compared to the same quarter last year. In addition, FIRST MARBLEHEAD CORP has also vastly surpassed the industry average cash flow growth rate of -38.85%.

You can view the full analysis from the report here: First Marblehead 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.

Value Line ( VALU) was another company that pushed the Financial Services industry lower today. Value Line was down $0.25 (1.6%) to $15.70 on light volume. Throughout the day, 5,265 shares of Value Line exchanged hands as compared to its average daily volume of 7,100 shares. The stock ranged in price between $15.47-$15.87 after having opened the day at $15.47 as compared to the previous trading day's close of $15.95.

Value Line, Inc. produces and sells investment related periodical publications primarily in the United States. Value Line has a market cap of $148.3 million and is part of the financial sector. Shares are up 37.4% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Value Line as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

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Highlights from TheStreet Ratings analysis on VALU go as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 40.9% when compared to the same quarter one year prior, rising from $1.45 million to $2.04 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.0%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • VALU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Despite the fact that VALU's debt-to-equity ratio is low, the quick ratio, which is currently 0.62, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for VALUE LINE INC is rather low; currently it is at 18.39%. Regardless of VALU's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VALU's net profit margin of 22.44% significantly outperformed against the industry.
  • Powered by its strong earnings growth of 40.00% and other important driving factors, this stock has surged by 64.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.

You can view the full analysis from the report here: Value Line 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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