3 Stocks Pushing The Financial Services Industry Lower

The Financial Services industry as a whole closed the day down 0.5% versus the S&P 500, which was down 0.8%. Laggards within the Financial Services industry included Calamos Focus Growth ETF ( CFGE), down 2.6%, Institutional Financial Markets ( IFMI), down 1.5%, China Commercial Credit ( CCCR), down 14.5%, US Global Investors ( GROW), down 4.0% and Value Line ( VALU), down 8.3%.

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

Financial Engines ( FNGN) is one of the companies that pushed the Financial Services industry lower today. Financial Engines was down $5.17 (11.4%) to $40.36 on heavy volume. Throughout the day, 1,948,310 shares of Financial Engines exchanged hands as compared to its average daily volume of 304,400 shares. The stock ranged in price between $38.09-$43.28 after having opened the day at $40.63 as compared to the previous trading day's close of $45.53.

Financial Engines, Inc. provides independent, technology-enabled personalized portfolio management services, investment advice, and retirement income services primarily to participants in employer-sponsored defined contribution plans in the United States. Financial Engines has a market cap of $2.4 billion and is part of the financial sector. Shares are up 24.6% year-to-date as of the close of trading on Wednesday. Currently there are 3 analysts who rate Financial Engines a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Financial Engines as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, notable return on equity, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from TheStreet Ratings analysis on FNGN go as follows:

  • FNGN's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 13.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 1.1% when compared to the same quarter one year prior, going from $7.82 million to $7.90 million.
  • FINANCIAL ENGINES INC reported flat earnings per share in the most recent quarter. 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, FINANCIAL ENGINES INC increased its bottom line by earning $0.70 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($0.96 versus $0.70).
  • 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 Capital Markets industry and the overall market on the basis of return on equity, FINANCIAL ENGINES INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has increased to $14.83 million or 44.55% when compared to the same quarter last year. Despite an increase in cash flow of 44.55%, FINANCIAL ENGINES INC is still growing at a significantly lower rate than the industry average of 135.40%.

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

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At the close, Value Line ( VALU) was down $1.18 (8.3%) to $13.11 on heavy volume. Throughout the day, 4,166 shares of Value Line exchanged hands as compared to its average daily volume of 2,500 shares. The stock ranged in price between $12.15-$15.00 after having opened the day at $15.00 as compared to the previous trading day's close of $14.29.

Value Line, Inc. produces and sells investment related periodical publications primarily in the United States. Value Line has a market cap of $149.5 million and is part of the financial sector. Shares are down 12.3% year-to-date as of the close of trading on Wednesday.

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TheStreet Ratings rates Value Line as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on VALU go as follows:

  • 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. In comparison to the other companies in the Media industry and the overall market, VALUE LINE INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • 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 0.65, displays a potential problem in covering short-term cash needs.
  • VALUE LINE INC's earnings per share declined by 35.3% in the most recent quarter compared to 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, VALUE LINE INC increased its bottom line by earning $0.74 versus $0.69 in the prior year.
  • Net operating cash flow has significantly decreased to -$0.02 million or 101.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Media industry. The net income has significantly decreased by 34.7% when compared to the same quarter one year ago, falling from $1.68 million to $1.10 million.

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

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US Global Investors ( GROW) was another company that pushed the Financial Services industry lower today. US Global Investors was down $0.10 (4.0%) to $2.27 on light volume. Throughout the day, 382 shares of US Global Investors exchanged hands as compared to its average daily volume of 11,300 shares. The stock ranged in price between $2.27-$2.27 after having opened the day at $2.27 as compared to the previous trading day's close of $2.36.

U.S. Global Investors, Inc. is a publicly owned investment manager. The firm primarily provides its services to investment companies. It also provides its services to pooled investment vehicles. The firm manages equity and fixed income mutual funds for its clients. US Global Investors has a market cap of $33.1 million and is part of the financial sector. Shares are down 23.6% year-to-date as of the close of trading on Wednesday.

TheStreet Ratings rates US Global Investors as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from TheStreet Ratings analysis on GROW go as follows:

  • U S GLOBAL INVESTORS INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, U S GLOBAL INVESTORS INC reported poor results of -$0.04 versus $0.00 in the prior year.
  • 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 Capital Markets industry. The net income has significantly decreased by 3375.9% when compared to the same quarter one year ago, falling from -$0.03 million to -$1.01 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market, U S GLOBAL INVESTORS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • This stock's share value has moved by only 41.53% over the past year. 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 revenue fell significantly faster than the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 33.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: US Global Investors Ratings Report

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