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 0.4% versus the S&P 500, which was down 0.3%. Laggards within the Banking industry included Athens ( AFCB), down 1.7%, Bank Bradesco ( BBDO), down 2.2%, Community Financial ( TCFC), down 1.6%, Valley Financial ( VYFC), down 1.7% and First West Virginia Bancorp ( FWV), down 7.9%.

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

OFG Bancorp ( OFG) is one of the companies that pushed the Banking industry lower today. OFG Bancorp was down $0.23 (1.5%) to $14.98 on average volume. Throughout the day, 272,836 shares of OFG Bancorp exchanged hands as compared to its average daily volume of 293,800 shares. The stock ranged in price between $14.98-$15.21 after having opened the day at $15.21 as compared to the previous trading day's close of $15.21.

OFG Bancorp, a financial holding company, provides various banking and financial services primarily in Puerto Rico. It operates in three segments: Banking, Financial Services, and Treasury. OFG Bancorp has a market cap of $679.5 million and is part of the financial sector. Shares are down 12.3% year-to-date as of the close of trading on Monday. Currently there are 4 analysts who rate OFG Bancorp a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates OFG Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on OFG go as follows:

  • The gross profit margin for OFG BANCORP is currently very high, coming in at 72.60%. It has increased significantly from the same period last year. Along with this, the net profit margin of 16.85% is above that of the industry average.
  • Net operating cash flow has increased to $54.21 million or 44.45% when compared to the same quarter last year. In addition, OFG BANCORP has also vastly surpassed the industry average cash flow growth rate of -97.63%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.7%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. When compared to other companies in the Commercial Banks industry and the overall market, OFG BANCORP'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: OFG Bancorp Ratings Report

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At the close, Valley Financial ( VYFC) was down $0.22 (1.7%) to $12.25 on light volume. Throughout the day, 1,000 shares of Valley Financial exchanged hands as compared to its average daily volume of 2,300 shares. The stock ranged in price between $12.16-$12.28 after having opened the day at $12.28 as compared to the previous trading day's close of $12.47.

Valley Financial Corporation operates as the holding company for Valley Bank that provides commercial and retail banking services to small-to-medium sized businesses, professional concerns, and individuals primarily in the Roanoke Valley of Virginia, the United States. Valley Financial has a market cap of $59.3 million and is part of the financial sector. Shares are up 18.2% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Valley Financial as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we find that net income has been generally deteriorating over time.

Highlights from TheStreet Ratings analysis on VYFC go as follows:

  • The revenue growth came in higher than the industry average of 12.7%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, VALLEY FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for VALLEY FINANCIAL CORP is currently very high, coming in at 78.81%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, VYFC's net profit margin of 17.14% compares favorably to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Commercial Banks industry average. The net income has decreased by 9.5% when compared to the same quarter one year ago, dropping from $1.93 million to $1.74 million.

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

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Community Financial ( TCFC) was another company that pushed the Banking industry lower today. Community Financial was down $0.33 (1.6%) to $20.73 on heavy volume. Throughout the day, 6,516 shares of Community Financial exchanged hands as compared to its average daily volume of 1,000 shares. The stock ranged in price between $20.21-$20.95 after having opened the day at $20.95 as compared to the previous trading day's close of $21.06.

Community Financial has a market cap of $98.7 million and is part of the financial sector. Shares are up 1.7% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Community Financial a buy, no analysts rate it a sell, and none rate it a hold.

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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