After poor earnings and revenue figures from financial stocks
Bank of America
) recently, the outlook for the sector been hazy. Downbeat economic
news that continues to weigh on banks, including high foreclosure
rates and high unemployment, suggests things might stay that way
for some time.
That means investors need to think about new investing
strategies for financial stocks and consider getting rid of bank
stocks with dwindling value. As a growth investor, I rarely
recommend financials because they simply don't have the fundamental
strength I look for because of their business models. It's nearly
impossible for a bank to post dramatic year-over-year earnings and
sales gains consistently, and I never invest in a company that
doesn't have strong growth potential.
While a few financial stocks do stand out from time to time,
what I'm struck by most right now is the number of financial stocks
that aren't living up to their potential and could have investors
cashing out very soon. To help you avoid future declines, here's my
lineup of 10 famous financial stocks to sell immediately:
HSBC Holdings (
HSBC Holdings plc
) is a global banking and financial services company based out of
London, UK. The British banking behemoth may be the world's largest
financial services group, but shareholder returns haven't been
reflecting that status lately. HBC slid into a downward trend last
year and hasn't found the momentum to reverse its path quite yet.
HBC stock is down -9.23% since the start of 2010 and shareholders
looking for a rebound are finding themselves out of luck lately -
and could be waiting a while longer.
Bank of America Corp. (
Bank of America Corporation
) is a bank holding company and a financial holding company with
more than 283,000 employees worldwide. After hitting a new 52-week
low last Thursday, BAC stock has shown little indication that you
should expect to see a rebound in the coming days. EPS estimates
are down and earnings are projected to stay down through the end of
the year on weaker revenue. This summer has been rough for
shareholders with BAC down -19.2% since mid May.
Global financial services provider
) made news this week when it agreed to pay $298 million to settle
claims that it violated the Trading with the Enemy Act and the
International Emergency Economic Powers Act by allegedly conducting
illegal transactions with banks in Cuba, Iran, Libya, Sudan and
Burma. BCS stock has taken investors on a wild ride this year with
plenty of ups and downs; shares are down -6.98% from this time last
Citigroup Inc. (
) boasts approximately 200 million customer accounts and does
business in more than 140 countries. But that scale has failed to
help the stock out in the wake of mortgage related losses and
slumping revenue. Citigroup share are down -5% in the last week
alone, and off -20% from late April. Whatever swagger Citi had this
year, it appears to be fading fast.
Credit Suisse Group (
Credit Suisse Group
) is a financial services company that provides advisory services,
solutions, and products to companies and clients globally, as well
as to retail clients in Switzerland. Shares of Credit Suisse have
been on the decline since April and have not been able to reverse
trajectory as quickly as the broader markets. With CS losing ground
to the tune of -9.75% year-to-date, investors might wan to think
about cutting their losses on Credit Suisse stock.
Goldman Sachs Group Inc. (
The Goldman Sachs Group, Inc.
) is a bank holding and a global investment banking, securities and
investment management company which has slowly been slipping down
the charts this past week. GS shares are down -7.64 points from
this time last week and the stock failed to meet earnings estimates
by a wide margin for the quarter ending in June of this year.
Investors should be weary of this ominous trend in GS stock as of
late, especially after earnings, and sell to avoid any further
JPMorgan Chase & Co. (
JPMorgan Chase & Co.
) is a financial holding company whose activities are organized
into six business segments: Investment Bank, Retail Financial
Services, Card Services, Commercial Banking, Treasury &
Securities Services and Asset Management. Investors have had to
watch as JPM shares have fallen -6.8% since it closed last Tuesday.
Add to that the grim estimates for sales growth for the coming
months, projected to be in the red until the year's end.
Lloyds Banking Group (
Lloyds Banking Group plc
) is a financial services group providing a range of banking and
financial services, primarily in the United Kingdom, to personal
and corporate customers in four segments: Retail, Wholesale, Wealth
and International and Insurance. LYG stockholders have been holding
their breath since shares plummeted at the start of 2010. Shares
are down -29.53% from this time last year. Stock value has remained
low since Lloyds agreed to pay $350m to settle the investigations
from early 2009 after admitting it allowed Iranian and Sudanese
clients to access the US banking system by altering wire transfer
Royal Bank of Scotland Group (
Royal Bank of Scotland Group plc
) is the holding company of a global banking and financial services
group. It operates in the United Kingdom, the United States, and
internationally through its two principal subsidiaries. Considering
that RBS stock was trading at over $200 per share a few years ago,
and it nearly collapsed during the onset of the financial crisis,
it is not hard to imagine why some investors are not keen on
gambling with RBS. With shares struggling to break through the $15
mark, it could be a long time before investors can relive the glory
days of RBS investing - such as the $200 adjusted share price RBS
commanded five years ago.
Wells Fargo & Co. (
Wells Fargo & Company
) is a diversified financial services company that provides retail,
commercial and corporate banking services through banking stores
located in 39 states and the District of Columbia. In the past
three months, WFC shares have lost -20.55% and estimates project
negative numbers for growth in the current quarter. With its
questionable business practices and failure to gain any ground on
the broader markets in recent months, WFC could be trimmed from
quite a few portfolios very soon.
As of this writing, Louis Navellier did not own a position in
any of the stocks named here.
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