Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Jul 08, 2020
Big Banks Set to Kick Off Earnings Season—How Do They Stack Up to One Another?

Big Banks Set to Kick Off Earnings Season—How Do They Stack Up to One Another?

Based on assets, the four largest banks in the United States are JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and Citigroup (NYSE:C). All four of these banks will report second quarter earnings results within a few days of one another. JPMorgan, Wells Fargo, and Citi will all report before the opening bell on July 14. Bank of America will report before the open two days later.

You could lump these four stocks together with a few other companies and you would have the definition of “too big to fail”.  Too big to fail is a phrase that came about after the financial crisis in 2007-2009. It was used to describe financial institutions that were so big that the overall economy could come under pressure if one of them failed.

Since that time the Treasury and the Federal Reserve have a system of tests that they call a "stress test" to measure different aspects of the bank to make sure we don't go through another financial crisis. Because of the nature of the test and the industry that was at the center of the financial crisis, the companies in this group are all financial firms.

The group is susceptible to moving with the overall economy. If the economy is growing banks tend to do well and they don't do well when the economy is contracting. With the economy struggling right now due to the global health crisis, banks are struggling too.

Looking at the Tickeron scorecard for each of the four stocks, there is only one that is rated as a “buy” while one is rated as a “sell” and two are rated as “strong sells”. Citigroup is the lone buy in the group.

JPMorgan and Wells Fargo are the two that get the strong sell ratings, and Bank of America is rated as a sell.

Digging into the reasoning behind the ratings, the group as a whole doesn’t do real well on the fundamental side of the equation. All four stock rank poorly in the SMR rating category. In fact, all four are in the bottom 10 percentile. Citi ranks highly in its Outlook Rating and in the Valuation Rating, but it also ranks poorly in four categories.

Bank of America scores well in the Outlook Rating and it ranks poorly in two other categories. Wells Fargo ranks poorly in four categories but gets a good Valuation Rating. JPMorgan gets neutral ratings in four categories and poor ratings in two categories.

Turning our attention to the technical analysis, three of the four have received bullish signals from the AROON Indicator in the last two weeks. Unfortunately, those are the only positive indicators in the whole bunch.

All four show stochastic indicators in oversold territory with Citigroup only being oversold for four days. Bank of America has been in oversold territory for nine days. Both JPMorgan and Wells Fargo have been in oversold territory for 14 days.

Looking at the analysts EPS estimates for the quarter, expectations are pretty low. I looked at the current EPS estimate, where the estimate was 90 days ago (when the pandemic was just starting to take a toll in the U.S.), and what each companies’ EPS was for the same quarter last year. The results were pretty abysmal.

                             

Bank of America has the smallest adjustments of the bunch. The EPS estimate has been lowered by 43.4% over the last three months and the estimate is 59.46% below last year’s EPS figure. JPMorgan shows slightly worse adjustments with the estimate being lowered by 44.55% and 60.28% below last year.

Citigroup’s estimate has been lowered by 68.71% and it’s 76.41% below 2019. Wells Fargo has struggled for several years now compared to its rivals and it is expected to struggle more than the others this quarter. The EPS estimate has dropped 91.89% and it’s 95.38% below the second quarter of 2019.

Banks have lagged the overall market over the past year and based on the earnings forecast, it doesn’t look like it will get any better after the earnings announcements. Citigroup might be worth a short-term trade based on Tickeron’s scorecard, but the other three have little appeal for investors at this point in time.

We could see small jumps if the banks beat estimates, but the long-term trend for earnings and revenue will need to improve dramatically to appeal in investors again.

Related Tickers: JPM
Related Portfolios: BANKS
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

Is Ethereum’s Bomb about to Explode?

Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

Central banks have been buying $2.4 billion in assets every hour for the past two months

Some $17.8 billion has been poured into  bond markets over the past week, the biggest move in more than three months.Around $3.5 billion has been invested into gold, the second largest on record. 
Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.