Though the stock market has shown signs of life recently,
including gains of +10% for the Dow Jones and +13% for the S&P
500 in the last three months, financial stocks have largely been
left out of the party. By contrast the
iShares Dow Jones US Financial Sector ETF
) is up less than +8%, and the
Financial Select Sector SPDR ETF
) is up only about +7%.
The reasons for trouble in the financial sector aren't much of a
mystery. With high unemployment, lending has dried up and
foreclosures continue to plague the balance sheets of many
financial stocks. Throw in stricter financial regulations
colloquially known as FinReg and you have a recipe for a sour run.
While there are a few diamonds in the rough, there just isn't a lot
of hope for these financial companies until broader economic issues
To protect your portfolio, here are four famous financial stocks
you should sell immediately.
Bank of America Corp. (
Odds are, you're familiar with
Bank of America Corp.
) as it's one of the biggest retail banking names in the U.S. Since
January, this stock has been in hot water, dropping -22.7%,
compared to gains for the broader stock market While many of the
Dow components have rallied since September, this stock has dropped
-6.6% in that time. Despite posting EPS of $0.27 last
quarter, experts have scaled back on their projections for this
quarter and have posted an estimate of $0.24. BAC is very
close to its 52-week low of $10.91.
JPMorgan Chase & Co. (
JPMorgan Chase & Co.
) is a financial holding company with numerous bank
subsidiaries. Over the past 12 months, this financial company
has slid -4.4%, compared to gains by the broader markets.
Things have not looked much better in the short term either, as JPM
stock is down -2.5% in the last month or so despite a strong
uptrend for the broader stock market. JPM stock has a 52-week
range of $35.16 to $48.20. Sell this stock before it does any more
damage to your portfolio.
ING Groep (
Global Financial Institution
) offers banking, investments, life insurance and retirement
services to its customers. After performing modestly for most
of 2010, the stock has faltered lately. In the last month, ING has
dropped -11.7%, leaving the stock with year to date returns of
exactly 0%. If watching all of their yearly returns disappear in a
month wasn't bad enough for shareholders, this financial stock also
posted a quarterly earnings growth of -25.9% in its last income
statement. ING should be sold immediately based on its recent
CME Group Inc. (
CME Group Inc.
) allows access for all asset classes for future products from a
single electronic trading platform. Year-to-date, this stock has
lost -6.9% compared to moderate gains by the broader markets. While
CME has beaten earnings estimates two of the last three quarters,
it has only been by a combined +1.5%; far from inspired
performance. The fact that CME stock is priced at $312.83
should also scare away potential buyers. The risk of getting burned
by this expensive stock is high. Sell now.