3 Stocks Pushing The Banking Industry Lower

The Banking industry as a whole closed the day down 0.6% versus the S&P 500, which was down 1.0%. Laggards within the Banking industry included Glen Burnie Bancorp ( GLBZ), down 2.8%, China Commercial Credit ( CCCR), down 2.2%, HMN Financial ( HMNF), down 4.9%, WVS Financial ( WVFC), down 4.2% and Bank Bradesco ( BBDO), down 1.9%.

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

Banco Santander Brasil SA/Brazil ( BSBR) is one of the companies that pushed the Banking industry lower today. Banco Santander Brasil SA/Brazil was down $0.13 (2.9%) to $4.35 on average volume. Throughout the day, 1,252,709 shares of Banco Santander Brasil SA/Brazil exchanged hands as compared to its average daily volume of 1,186,600 shares. The stock ranged in price between $4.22-$4.47 after having opened the day at $4.35 as compared to the previous trading day's close of $4.48.

Banco Santander (Brasil) S.A. provides banking products and services in Brazil and internationally. It offers commercial banking, investment, mortgage, leasing, credit card, and foreign exchange services, as well as various lending and financing services. Banco Santander Brasil SA/Brazil has a market cap of $33.0 billion and is part of the financial sector. Shares are down 10.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Banco Santander Brasil SA/Brazil a buy, 1 analyst rates it a sell, and 2 rate it a hold.

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TheStreet Ratings rates Banco Santander Brasil SA/Brazil as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on BSBR go as follows:

  • Net operating cash flow has significantly increased by 76.44% to -$1,493.96 million when compared to the same quarter last year. Despite an increase in cash flow of 76.44%, BANCO SANTANDER BRASIL -ADR is still growing at a significantly lower rate than the industry average of 795.39%.
  • The revenue fell significantly faster than the industry average of 3.4%. Since the same quarter one year prior, revenues fell by 42.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for BANCO SANTANDER BRASIL -ADR is rather low; currently it is at 20.43%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 14.55% trails that of 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 greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 18.0% when compared to the same quarter one year ago, dropping from $617.86 million to $506.51 million.

You can view the full analysis from the report here: Banco Santander Brasil SA/Brazil Ratings Report

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At the close, Bank Bradesco ( BBDO) was down $0.15 (1.9%) to $7.68 on light volume. Throughout the day, 2,786 shares of Bank Bradesco exchanged hands as compared to its average daily volume of 4,100 shares. The stock ranged in price between $7.43-$7.83 after having opened the day at $7.83 as compared to the previous trading day's close of $7.83.

Bank Bradesco has a market cap of $38.5 billion and is part of the financial sector. Shares are down 27.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Bank Bradesco a buy, no analysts rate it a sell, and 1 rates it a hold.

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HMN Financial ( HMNF) was another company that pushed the Banking industry lower today. HMN Financial was down $0.57 (4.9%) to $11.04 on heavy volume. Throughout the day, 4,943 shares of HMN Financial exchanged hands as compared to its average daily volume of 2,200 shares. The stock ranged in price between $10.88-$11.34 after having opened the day at $11.34 as compared to the previous trading day's close of $11.61.

HMN Financial, Inc. operates as the holding company for Home Federal Savings Bank that provides community banking products and services in Minnesota, Iowa, and Wisconsin. HMN Financial has a market cap of $50.7 million and is part of the financial sector. Shares are down 6.4% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates HMN Financial as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from TheStreet Ratings analysis on HMNF go as follows:

  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 2.9%. 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 HMN FINANCIAL INC is currently very high, coming in at 97.00%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, HMNF's net profit margin of 8.43% is significantly lower than the industry average.
  • 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 76.9% when compared to the same quarter one year ago, falling from $2.53 million to $0.59 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 Thrifts & Mortgage Finance industry and the overall market, HMN FINANCIAL INC'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: HMN Financial Ratings Report

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