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4 Winning Finance Stocks With Further Upside Potential Left
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The Zacks Finance Sector comprises a diversified set of players, ranging from credit services providers, banks, investment and insurance companies, payment card providers and trading platforms to real estate firms, which offer a varied set of financial services to their clients. The ongoing macroeconomic volatility created investment opportunities for numerous stocks this year while others faced challenges.
The evolving financial landscape has worked as a natural filter for prudent investors looking for winning finance stocks. Companies likeTradeweb Markets Inc. (TW - Free Report) , Blue Owl Capital Corporation (OBDC - Free Report) , Axos Financial, Inc. (AX - Free Report) and PJT Partners Inc. (PJT - Free Report) are good choices for investment in the current scenario.
The Dynamic Financial Landscape
The sustained high inflation, although currently showing signs of slowing down, along with other macroeconomic headwinds, continues to exert pressure on consumer sentiments. Companies providing different types of loans mostly witnessed muted demand. However, with improving inflation numbers, the Fed has paused rate hikes for now and even signaled rate cuts in 2024. This will have a positive effect on demand for various financial products, including loans and mortgage services, in the coming days.
Finance companies that have secured high interest rates through prudent investments are experiencing substantial growth in investment income. Assets that are floating in nature are expected to continue generating higher yields. Also, the high interest rate environment is likely to keep benefiting SBIC & Commercial Finance companies due to increased prepayments and demand for refinancing.
Finance companies operating trading platforms witnessed increased trading volumes amid market volatility. Trade platforms offering government bonds witnessed higher demand from clients looking for better stability. Companies operating in rates, credit, money markets and others are expected to witness continued growth in average daily volume (ADV).
The volatile market has created M&A opportunities for finance companies seeking to broaden capabilities, expand footprints, diversify product portfolios, and enhance asset quality. The latter half of 2023 has witnessed numerous deals and agreements across various segments of the finance sector. Investment banking companies, particularly larger ones, have extended their geographical footprints, expanding businesses and augmenting their networks. Despite these efforts, the current heightened geopolitical uncertainties present obstacles, hindering them from realizing their full potential.
Finance sector companies continue to invest in cutting-edge technologies like blockchain, AI, advanced analytics, telematics, cloud computing and robotic process automation. These advancements are anticipated to automate processes, reducing operating expenses and further enhancing the efficiency and margins of finance companies.
Earlier this month, the European Union designed AI regulations, reflecting increasing efforts to regulate artificial intelligence, with potential global implications in the days ahead. These rules aim to safeguard fundamental rights, national security and employment.
Despite several alarming predictions from analysts, consumer spending showed resilience throughout the year, particularly during the holiday season. The surge in the search for better deals and incentives was notable, with online shopping experiencing significantly greater growth compared to physical stores. The favorable spending habits of consumers signal positive prospects for finance stocks.
4 Stocks to Consider
The overall economic scenario is expected to result in consistent growth of the finance stocks, especially those with strong business fundamentals. In the year-to-date period, the finance sector has risen 15.6% compared with the 25% growth of the S&P 500 Index. Considering their operational strength, we have selected four stocks with the help of the Zacks Stock Screener that have gained more than 30% year to date and are well poised to keep the momentum alive in 2024. These stocks currently carry either a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Rank is a reliable tool that helps you trade confidently regardless of your trading style and risk tolerance. To learn more about how you can use this proven system for market-beating gains, visit Zacks Rank Education.
Image Source: Zacks Investment Research
Tradeweb Markets: Headquartered in New York, Tradeweb Markets operates electronic marketplaces around the globe, facilitating trading in a range of asset classes and providing access to data and analytics. Solid growth in ADV is expected to boost the company’s bottom line going ahead. Strategic buyouts are likely to help TW scale its business segments. Its growing cash-generating abilities are major positives.
The 2023 Zacks Consensus Estimate for Tradeweb Markets’ earnings is pegged at $2.19 per share, indicating 15.3% year-over-year growth. It has witnessed two upward estimate revisions in the past 30 days against none in the opposite direction. It beat the Zacks Consensus Estimate for earnings in two of the last four quarters and met twice, with an average surprise of 2.6%.
Zacks Rank: #2
Average Broker Recommendation: 1.79
Last Closing Price: $90.63
YTD Price Performance: 39.6%
Blue Owl Capital: This New York-based business development company specializes in different types of fund investments. Its solid portfolio health, inorganic growth opportunities and growing investment income are major tailwinds. The high interest rate environment is boosting OBDC’s investment income.
The 2023 Zacks Consensus Estimate for Blue Owl Capital’s earnings is pegged at $1.91 per share, suggesting a 35.5% year-over-year jump. It has witnessed six upward estimate revisions in the past 60 days against none in the opposite direction. OBDC beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with an average surprise of 3.4%.
Zacks Rank: #1
Average Broker Recommendation: 1.67
Last Closing Price: $15.17
YTD Price Performance: 31.3%
Axos Financial: Headquartered in Las Vegas, NV, Axos Financial offers consumer and business banking products in the domestic market. Both its banking and securities businesses are witnessing growth in interest and non-interest income. Balanced loan growth, as well as increasing net interest margins, are aiding the company’s performance.
The fiscal 2024 Zacks Consensus Estimate for Axos Financial’s earnings is pegged at $5.70 per share, suggesting a 12.4% year-over-year increase. It has witnessed two upward estimate revisions in the past month against none in the opposite direction. AX beat the Zacks Consensus Estimate for earnings in all the last four quarters, with an average surprise of 11.6%.
Zacks Rank: #2
Average Broker Recommendation: 1.67
Last Closing Price: $56.80
YTD Price Performance: 48.6%
PJT Partners: New York-based PJT Partners is an advisory-focused investment bank providing services worldwide. Increasing restructuring revenues and interest income are aiding its top-line growth. Its balance sheet strength, with no funded debt and ample cash, enables it to take unitholder value-boosting efforts through repurchases and dividends.
The Zacks Consensus Estimate for PJT Partners’ current-year earnings is pegged at $3 per share, which has witnessed one upward estimate revision in the past 60 days against none in the opposite direction. PJT beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed twice, with an average surprise of 24.3%.
Zacks Rank: #2
Average Broker Recommendation: 2.20
Last Closing Price: $103.06
YTD Price Performance: 39.9%
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4 Winning Finance Stocks With Further Upside Potential Left
The Zacks Finance Sector comprises a diversified set of players, ranging from credit services providers, banks, investment and insurance companies, payment card providers and trading platforms to real estate firms, which offer a varied set of financial services to their clients. The ongoing macroeconomic volatility created investment opportunities for numerous stocks this year while others faced challenges.
The evolving financial landscape has worked as a natural filter for prudent investors looking for winning finance stocks. Companies likeTradeweb Markets Inc. (TW - Free Report) , Blue Owl Capital Corporation (OBDC - Free Report) , Axos Financial, Inc. (AX - Free Report) and PJT Partners Inc. (PJT - Free Report) are good choices for investment in the current scenario.
The Dynamic Financial Landscape
The sustained high inflation, although currently showing signs of slowing down, along with other macroeconomic headwinds, continues to exert pressure on consumer sentiments. Companies providing different types of loans mostly witnessed muted demand. However, with improving inflation numbers, the Fed has paused rate hikes for now and even signaled rate cuts in 2024. This will have a positive effect on demand for various financial products, including loans and mortgage services, in the coming days.
Finance companies that have secured high interest rates through prudent investments are experiencing substantial growth in investment income. Assets that are floating in nature are expected to continue generating higher yields. Also, the high interest rate environment is likely to keep benefiting SBIC & Commercial Finance companies due to increased prepayments and demand for refinancing.
Finance companies operating trading platforms witnessed increased trading volumes amid market volatility. Trade platforms offering government bonds witnessed higher demand from clients looking for better stability. Companies operating in rates, credit, money markets and others are expected to witness continued growth in average daily volume (ADV).
The volatile market has created M&A opportunities for finance companies seeking to broaden capabilities, expand footprints, diversify product portfolios, and enhance asset quality. The latter half of 2023 has witnessed numerous deals and agreements across various segments of the finance sector. Investment banking companies, particularly larger ones, have extended their geographical footprints, expanding businesses and augmenting their networks. Despite these efforts, the current heightened geopolitical uncertainties present obstacles, hindering them from realizing their full potential.
Finance sector companies continue to invest in cutting-edge technologies like blockchain, AI, advanced analytics, telematics, cloud computing and robotic process automation. These advancements are anticipated to automate processes, reducing operating expenses and further enhancing the efficiency and margins of finance companies.
Earlier this month, the European Union designed AI regulations, reflecting increasing efforts to regulate artificial intelligence, with potential global implications in the days ahead. These rules aim to safeguard fundamental rights, national security and employment.
Despite several alarming predictions from analysts, consumer spending showed resilience throughout the year, particularly during the holiday season. The surge in the search for better deals and incentives was notable, with online shopping experiencing significantly greater growth compared to physical stores. The favorable spending habits of consumers signal positive prospects for finance stocks.
4 Stocks to Consider
The overall economic scenario is expected to result in consistent growth of the finance stocks, especially those with strong business fundamentals. In the year-to-date period, the finance sector has risen 15.6% compared with the 25% growth of the S&P 500 Index. Considering their operational strength, we have selected four stocks with the help of the Zacks Stock Screener that have gained more than 30% year to date and are well poised to keep the momentum alive in 2024. These stocks currently carry either a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Rank is a reliable tool that helps you trade confidently regardless of your trading style and risk tolerance. To learn more about how you can use this proven system for market-beating gains, visit Zacks Rank Education.
Image Source: Zacks Investment Research
Tradeweb Markets: Headquartered in New York, Tradeweb Markets operates electronic marketplaces around the globe, facilitating trading in a range of asset classes and providing access to data and analytics. Solid growth in ADV is expected to boost the company’s bottom line going ahead. Strategic buyouts are likely to help TW scale its business segments. Its growing cash-generating abilities are major positives.
The 2023 Zacks Consensus Estimate for Tradeweb Markets’ earnings is pegged at $2.19 per share, indicating 15.3% year-over-year growth. It has witnessed two upward estimate revisions in the past 30 days against none in the opposite direction. It beat the Zacks Consensus Estimate for earnings in two of the last four quarters and met twice, with an average surprise of 2.6%.
Zacks Rank: #2
Average Broker Recommendation: 1.79
Last Closing Price: $90.63
YTD Price Performance: 39.6%
Blue Owl Capital: This New York-based business development company specializes in different types of fund investments. Its solid portfolio health, inorganic growth opportunities and growing investment income are major tailwinds. The high interest rate environment is boosting OBDC’s investment income.
The 2023 Zacks Consensus Estimate for Blue Owl Capital’s earnings is pegged at $1.91 per share, suggesting a 35.5% year-over-year jump. It has witnessed six upward estimate revisions in the past 60 days against none in the opposite direction. OBDC beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with an average surprise of 3.4%.
Zacks Rank: #1
Average Broker Recommendation: 1.67
Last Closing Price: $15.17
YTD Price Performance: 31.3%
Axos Financial: Headquartered in Las Vegas, NV, Axos Financial offers consumer and business banking products in the domestic market. Both its banking and securities businesses are witnessing growth in interest and non-interest income. Balanced loan growth, as well as increasing net interest margins, are aiding the company’s performance.
The fiscal 2024 Zacks Consensus Estimate for Axos Financial’s earnings is pegged at $5.70 per share, suggesting a 12.4% year-over-year increase. It has witnessed two upward estimate revisions in the past month against none in the opposite direction. AX beat the Zacks Consensus Estimate for earnings in all the last four quarters, with an average surprise of 11.6%.
Zacks Rank: #2
Average Broker Recommendation: 1.67
Last Closing Price: $56.80
YTD Price Performance: 48.6%
PJT Partners: New York-based PJT Partners is an advisory-focused investment bank providing services worldwide. Increasing restructuring revenues and interest income are aiding its top-line growth. Its balance sheet strength, with no funded debt and ample cash, enables it to take unitholder value-boosting efforts through repurchases and dividends.
The Zacks Consensus Estimate for PJT Partners’ current-year earnings is pegged at $3 per share, which has witnessed one upward estimate revision in the past 60 days against none in the opposite direction. PJT beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed twice, with an average surprise of 24.3%.
Zacks Rank: #2
Average Broker Recommendation: 2.20
Last Closing Price: $103.06
YTD Price Performance: 39.9%