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 up 0.4% versus the S&P 500, which was down 0.2%. Laggards within the Banking industry included Magyar Bancorp ( MGYR), down 2.9%, OptimumBank Holdings ( OPHC), down 12.8%, Citizens ( CIZN), down 2.0%, Broadway Financial ( BYFC), down 1.9% and Oak Valley Bancorp ( OVLY), down 3.5%.

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

Royal Bank of Scotland Group (The ( RBS) is one of the companies that pushed the Banking industry lower today. Royal Bank of Scotland Group (The was down $0.29 (2.3%) to $12.19 on light volume. Throughout the day, 218,040 shares of Royal Bank of Scotland Group (The exchanged hands as compared to its average daily volume of 677,500 shares. The stock ranged in price between $12.15-$12.27 after having opened the day at $12.24 as compared to the previous trading day's close of $12.48.

The Royal Bank of Scotland Group plc, through its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers worldwide. Royal Bank of Scotland Group (The has a market cap of $71.9 billion and is part of the financial sector. Shares are up 10.2% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Royal Bank of Scotland Group (The a buy, 1 analyst rates it a sell, and none rate it a hold.

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TheStreet Ratings rates Royal Bank of Scotland Group (The as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from TheStreet Ratings analysis on RBS go as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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 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 230.4% when compared to the same quarter one year prior, rising from -$1,105.12 million to $1,441.43 million.
  • ROYAL BANK OF SCOTLAND GROUP reported significant earnings per share improvement 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, ROYAL BANK OF SCOTLAND GROUP reported poor results of -$2.68 versus -$1.72 in the prior year. This year, the market expects an improvement in earnings ($48.23 versus -$2.68).
  • The revenue fell significantly faster than the industry average of 1.3%. Since the same quarter one year prior, revenues fell by 29.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Commercial Banks industry and the overall market, ROYAL BANK OF SCOTLAND GROUP's return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Royal Bank of Scotland Group (The Ratings Report

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At the close, Citizens ( CIZN) was down $0.39 (2.0%) to $19.11 on light volume. Throughout the day, 510 shares of Citizens exchanged hands as compared to its average daily volume of 800 shares. The stock ranged in price between $19.11-$19.11 after having opened the day at $19.11 as compared to the previous trading day's close of $19.50.

Citizens Holding Company operates as the bank holding company for The Citizens Bank of Philadelphia that provides commercial and personal banking products and services in Mississippi, the United States. Citizens has a market cap of $95.1 million and is part of the financial sector. Shares are up 4.8% year-to-date as of the close of trading on Monday.

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

Highlights from TheStreet Ratings analysis on CIZN go as follows:

  • Net operating cash flow has increased to $3.40 million or 48.57% when compared to the same quarter last year. In addition, CITIZENS HOLDING CO has also vastly surpassed the industry average cash flow growth rate of -80.39%.
  • The gross profit margin for CITIZENS HOLDING CO is currently very high, coming in at 90.25%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 19.19% trails the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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, CITIZENS HOLDING CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CITIZENS HOLDING CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, CITIZENS HOLDING CO increased its bottom line by earning $1.47 versus $1.39 in the prior year.

You can view the full analysis from the report here: Citizens 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.

Magyar Bancorp ( MGYR) was another company that pushed the Banking industry lower today. Magyar Bancorp was down $0.25 (2.9%) to $8.13 on heavy volume. Throughout the day, 2,000 shares of Magyar Bancorp exchanged hands as compared to its average daily volume of 800 shares. The stock ranged in price between $8.13-$8.32 after having opened the day at $8.31 as compared to the previous trading day's close of $8.38.

Magyar Bancorp, Inc. operates as the bank holding company for Magyar Bank that provides various banking products and services in New Jersey. Magyar Bancorp has a market cap of $48.8 million and is part of the financial sector. Shares are up 11.0% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Magyar Bancorp as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, impressive record of earnings per share growth and increase in stock price during the past year. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

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Highlights from TheStreet Ratings analysis on MGYR go as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 48.8% when compared to the same quarter one year prior, rising from $0.13 million to $0.19 million.
  • MAGYAR 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, MAGYAR BANCORP INC increased its bottom line by earning $0.09 versus $0.04 in the prior year.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, MAGYAR BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

You can view the full analysis from the report here: Magyar 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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