Bargain Financial Stocks?
With its recent run-up, is it time to jump further into the financials sector?
Although many investors remain cautious about buying into this group, there are others who believe that all the negative news for the financial stocks is already priced into the market and that some of these companies might be poised for a bigger rebound in the long term.
In the past three months, the S&P Financial Sector is up by nearly 7 percent, with only the Thrifts and Mortgage subgroup in negative territory. Looking at the past month's performance among all the S&P 500 sectors, the financial sector is leading the way this month with a gain of nearly 4 percent, closely followed by the Information and Technology Sector.
Here are the results of a stock screen of the entire S&P 500 Financial Sector looking for companies that have relatively low PEG ratios in relation to the consensus of forward earnings growth for the forward fiscal year. Some of these have not had the run-up that their peers have had in recent months, but still have high growth expectations.
Note that many of these companies have high growth forecasts because the estimates for the current fiscal year have been so dismal. As always, keep in mind that the stock screen should help you generate ideas, but there is more homework to be done.
Data Source: Reuters