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4 Top-Ranked Financial Stocks to Brave September Blues
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Of late, the finance sector has been performing well with some monthly volatility. The nation’s economic health, on which the sector is largely dependent, has been showing steady improvement with increasing real GDP numbers, declining unemployment rate, improving consumer spending and stabilizing housing market.
Riding on higher rates and improved lending margins, along with the expectation of lesser regulations under Donald Trump administration, the finance sector has emerged triumphant. The S&P 500 Financials (Sector) Index gained 5.7%, so far this year.
Overall, the continuation of structural changes, with investments in emerging technologies, and a rising rate environment keep the prospects for financial stocks bright.
The finance companies’ performance in the second quarter was decent. While the companies were able to maintain bottom-line growth, concerns over underlying weakness shadowed the optimism to some extent. Results demonstrated an upswing in loans and improved margins. However, lower treasury yields curbed the benefits. Nevertheless, a rise in deposit balances and manageable expense level supported the results.
While September is generally considered the worst performing month for the stock market, here we bring a handful of finance stocks that are expected to give good returns, supported by the above mentioned catalysts.
Selecting the Winning Stocks
We have taken the help of the Zacks Stock Screener to shortlist financial stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a VGM Score of A or B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank of 1 or 2, offer the best upside potential.
To narrow down the list, we have taken stocks with market capitalization of over $4 billion and positive estimate revisions over the past 60 days.
Here are the top-four financial stocks that meet the criteria:
Santa Ana, CA-based First American Financial Corporation (FAF - Free Report) provides various financial services through a network of direct operations and agents in 49 states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, South Korea and globally.
Zacks Rank: #2 VGM Score: B Market Cap: $5.3 billion Change F1 Est. (8 weeks): 9.2%
Raymond James Financial, Inc. (RJF - Free Report) , headquartered in St. Petersburg, Fl, is engaged in underwriting, distribution, trading, and brokerage business, along with the sale of mutual funds and other investment products in the United States, Canada, Europe and globally.
Zacks Rank: #2 VGM Score: B Market Cap: $11.4 billion Change F1 Est. (8 weeks): 2%
MGIC Investment Corporation (MTG - Free Report) , headquartered in Milwaukee, WI, is a provider of private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States.
Zacks Rank: #2 VGM Score: B Market Cap: $4.4 billion Change in F1 Estimate (8 weeks): 7.6%
Des Moines, IA-based Principal Financial Group (PFG - Free Report) provides retirement, asset management and insurance products and services around the world.
Zacks Rank: #2 VGM Score: B Market Cap: $18.2 billion Change in F1 Estimate (8 weeks): 2.2%
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
4 Top-Ranked Financial Stocks to Brave September Blues
Of late, the finance sector has been performing well with some monthly volatility. The nation’s economic health, on which the sector is largely dependent, has been showing steady improvement with increasing real GDP numbers, declining unemployment rate, improving consumer spending and stabilizing housing market.
Riding on higher rates and improved lending margins, along with the expectation of lesser regulations under Donald Trump administration, the finance sector has emerged triumphant. The S&P 500 Financials (Sector) Index gained 5.7%, so far this year.
Overall, the continuation of structural changes, with investments in emerging technologies, and a rising rate environment keep the prospects for financial stocks bright.
The finance companies’ performance in the second quarter was decent. While the companies were able to maintain bottom-line growth, concerns over underlying weakness shadowed the optimism to some extent. Results demonstrated an upswing in loans and improved margins. However, lower treasury yields curbed the benefits. Nevertheless, a rise in deposit balances and manageable expense level supported the results.
While September is generally considered the worst performing month for the stock market, here we bring a handful of finance stocks that are expected to give good returns, supported by the above mentioned catalysts.
Selecting the Winning Stocks
We have taken the help of the Zacks Stock Screener to shortlist financial stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a VGM Score of A or B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank of 1 or 2, offer the best upside potential.
To narrow down the list, we have taken stocks with market capitalization of over $4 billion and positive estimate revisions over the past 60 days.
Here are the top-four financial stocks that meet the criteria:
Santa Ana, CA-based First American Financial Corporation (FAF - Free Report) provides various financial services through a network of direct operations and agents in 49 states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, South Korea and globally.
Zacks Rank: #2
VGM Score: B
Market Cap: $5.3 billion
Change F1 Est. (8 weeks): 9.2%
You can see the complete list of today’s Zacks #1 Rank stocks here.
Raymond James Financial, Inc. (RJF - Free Report) , headquartered in St. Petersburg, Fl, is engaged in underwriting, distribution, trading, and brokerage business, along with the sale of mutual funds and other investment products in the United States, Canada, Europe and globally.
Zacks Rank: #2
VGM Score: B
Market Cap: $11.4 billion
Change F1 Est. (8 weeks): 2%
MGIC Investment Corporation (MTG - Free Report) , headquartered in Milwaukee, WI, is a provider of private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States.
Zacks Rank: #2
VGM Score: B
Market Cap: $4.4 billion
Change in F1 Estimate (8 weeks): 7.6%
Des Moines, IA-based Principal Financial Group (PFG - Free Report) provides retirement, asset management and insurance products and services around the world.
Zacks Rank: #2
VGM Score: B
Market Cap: $18.2 billion
Change in F1 Estimate (8 weeks): 2.2%
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>