3 Stocks Pushing The Financial Services Industry Lower

The Financial Services industry as a whole closed the day down 0.2% versus the S&P 500, which was up 0.2%. Laggards within the Financial Services industry included RENN Global Entrepreneurs Fund ( RCG), down 2.6%, Rand Capital ( RAND), down 2.1%, US Global Investors ( GROW), down 7.5%, Siebert Financial ( SIEB), down 3.2% and China Ceramics ( CCCL), down 8.2%.

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 $1.38 (3.7%) to $36.07 on heavy volume. Throughout the day, 828,159 shares of Financial Engines exchanged hands as compared to its average daily volume of 332,100 shares. The stock ranged in price between $35.92-$37.76 after having opened the day at $37.56 as compared to the previous trading day's close of $37.45.

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 $2.0 billion and is part of the financial sector. Shares are up 2.5% year-to-date as of the close of trading on Wednesday. Currently there are 3 analysts who rate Financial Engines a buy, 1 analyst rates it a sell, and 2 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, expanding profit margins and solid stock price performance. 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 6.8%. Since the same quarter one year prior, revenues rose by 12.1%. 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.
  • FINANCIAL ENGINES INC's earnings per share declined by 15.8% 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, 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 ($0.95 versus $0.70).
  • The gross profit margin for FINANCIAL ENGINES INC is rather high; currently it is at 58.73%. Regardless of FNGN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.86% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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. We feel, however, that the other strengths this company displays justify these higher price levels.
  • Net operating cash flow has declined marginally to $19.09 million or 3.84% when compared to the same quarter last year. Despite a decrease in cash flow of 3.84%, FINANCIAL ENGINES INC is still significantly exceeding the industry average of -505.86%.

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

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At the close, China Ceramics ( CCCL) was down $0.08 (8.2%) to $0.90 on light volume. Throughout the day, 4,001 shares of China Ceramics exchanged hands as compared to its average daily volume of 39,100 shares. The stock ranged in price between $0.90-$0.98 after having opened the day at $0.93 as compared to the previous trading day's close of $0.98.

China Ceramics has a market cap of $20.0 million and is part of the financial sector. Shares are up 21.0% year-to-date as of the close of trading on Wednesday.

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US Global Investors ( GROW) was another company that pushed the Financial Services industry lower today. US Global Investors was down $0.18 (7.5%) to $2.23 on light volume. Throughout the day, 6,236 shares of US Global Investors exchanged hands as compared to its average daily volume of 11,000 shares. The stock ranged in price between $2.22-$2.49 after having opened the day at $2.45 as compared to the previous trading day's close of $2.41.

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 $28.6 million and is part of the financial sector. Shares are down 22.3% 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 35.33% 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 6.8%. 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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