Financial stocks have been hurting all year.
) is off -14%, retail banking giants
Bank of America
) are off -16% so far in 2011, and investment bank Goldman Sachs
(NYSE:GS) is off -20% year-to-date. The other financial
JP Morgan Chase
) is "only" down about -2%.
So will things turn around? Not likely. The first quarter GDP
revision that showed that GDP growth remains at 1.8%, which was
disappointing, since economists were expecting a positive
revision to 2.2% annual GDP growth. Financial stocks are going to
see a tough headwind with growth rates that low. Also, consumer
spending was weaker than initially estimated and grew at only a
2.2% annual pace, which is down significantly from 4% in the
fourth quarter. When you consider the weight of bad mortgages
that continue to plague Bank of America, Citigroup and others, it
doesn't bode well that consumer spending is drying up
again. It is clear that higher food and energy prices are
talking their toll on households.
To be clear, I am not a bear long-term - and there are a lot
of good stocks to buy right now. But these financial stocks
aren't part of that group. Here's the breakdown of five mega bank
stocks to sell now:
Bank of America:
Bank and financial holding giant
Bank of America
) has had a rough 2011, dropping -16% year-to-date. In the last
12 months, this financial stalwart is down a total -27% as well.
Not to be overlooked, BAC posted a quarterly earnings growth of
-36% in its last income statement. Not good.
Read about how the futures of North Carolina -
and the futures of the U.S. as a whole - are tied to BAC
A national bank with branches in 23 states, JPMorgan Chase (NYSE:
) is another overweight stock worth selling. Year-to-date, shares
of JPM have dropped -2%, compared to a gain +6% by the Dow Jones
Industrial Average. This bank stock does offer a dividend, but at
just 25 cents, it is nothing to write home about.
Wells Fargo & Co:
Diversified financial holding company
Wells Fargo & Co.
) is down 5% in the last 12 months, despite strong gains toward
the end of 2010. Year-to-date, WFC has lost -13%, compared to
gains by the broader markets. Sell this financial stock as it
trades near its 52-week low of $23.02.
Another diversified financial services holding company trading
near its 52-week low is
) trading just above $36.20. While the Dow has been busy gaining,
Citigroup has been busy losing - to the tune of -16%. A quarterly
earnings growth of -32%, year-over-year, from its last income
statement is also worth mentioning.
Down quarterly earnings growth is a trend on this list as
) also posted a -21% change, year-over-year, last quarter. This
stock is also down 4% in the last 12 months and 19% since the
start of 2011.
Goldman Sachs represents all that is good and
bad about investment banking in America.
As of this writing, Louis Navellier did not own a position
in any of the stocks named here.