6 Incredibly Cheap Financial Stocks

|
 |  Includes: GNW, GS, HIG, JPM, MS, SNV
by: Hawkinvest
A new Wallace Forbes article states that the "U.S. financial sector is incredibly undervalued, in face of debt debate." The article discusses the best stock picks for bargains in the financial sector, which includes some top tier companies such as Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), JP Morgan (NYSE:JPM) and others. Much of the recent decline in the financials is directly related to the drop in the stock market and concerns over the debt ceiling currently being debated by the President and members of Congress. As each day passes without a resolution, these stocks are getting trimmed more and more. The worst case scenarios rarely play out and this recent correction in the financials is looking like a classic buying opportunity. A resolution to the debt limit issue could lead to a strong rebound in these stocks.
Genworth Financial, Inc. (NYSE:GNW) is a leading insurance and financial services company. Genworth has been impacted by losses with mortgage insurance and this will continue to weigh on results; however, the worst might be priced in by now with the stock trading at about five times 2012 earnings and for only a fraction of book value.
Here are some key points for GNW:
Current share price: $7.95
The 52-week range is $7.92 to $16.10
Earnings estimates for 2011: 90 cents per share
Earnings estimates for 2012: $1.61 per share
Annual dividend: None
Book value: $28.67 per share
Morgan Stanley is a leading investment banking company that offers a wide range of financial services and products. Morgan Stanley recently reported better than expected financial results. Morgan Stanley is a leader in mergers and acquisitions and this part of their business should continue to grow. This stock is trading well below book value and for just over seven times 2012 earnings.
Here are some key points for MS:
Current share price: $22.54
The 52-week range is $20.18 to $31.04
Earnings estimates for 2011: 96 cents per share
Earnings estimates for 2012: $2.77 per share
Annual dividend: 20 cents per share which yields 0.8%
Book value: $31.45 per share
Synovus Financial Corp. (NYSE:SNV) is a regional bank with operations in Georgia, Alabama, South Carolina, Florida, and Tennessee. In the Forbes article, Hilary Kramer states:

I’m also expecting that some of the small regional banks, like Synovus Financial of Columbus, Georgia will bounce back, too. This is a stock trading in the $2 range. An investor with patience could see a turn around in 18 months to two years from now. A stock like this could be a double. Synovus is still the leader of the southeast in certain communities.

Here are some key points for SNV:
Current share price: $1.89
The 52-week range is $1.87 to $2.99
Earnings estimates for 2011: a loss of 21 cents per share
Earnings estimates for 2012: a profit of 17 cents per share
Annual dividend: 4 cents per share which yields 2%
Book value: $2.47 per share
JP Morgan Chase is one of the best managed and largest banks in the United States. This stock is probably one of the lowest risk financial stocks in the market and, at less than eight times 2012 earnings and below book value, it is likely to bounce back quickly.
Here are some key points for JPM:
Current share price: $40.67

The 52-week range is $35.55 to $48.36
Earnings estimates for 2011: $5.02 per share
Earnings estimates for 2012: $5.67 per share
Annual dividend: $1 per share which yields 2.4%
Book value: $44.23 per share

The Goldman Sachs Group is a leading investment bank. Goldman has some of the smartest minds in finance working for it. This company has been challenged by government regulation but it is likely to overcome these hurdles in time. This stock is trading for about eight times 2012 earnings and is currently right around book value.

Here are some key points for GS:
Current share price: $134.72
The 52-week range is $125.50 to $175.34
Earnings estimates for 2011: $11.29 per share
Earnings estimates for 2012: $16.83 per share
Annual dividend: $1.40 per share which yields 1%
Book value: $133.94 per share

Hartford Financial Services (NYSE:HIG) is a leading insurance company and also offers other financial products both in the US and globally. Recently, Hartford announced that second quarter profits would be well below expectations due to asbestos litigation and losses from major storms. This lower than expected profit has caused the shares to drop and has created a great buying opportunity for longer term investors.

Here are some key points for HIG:
Current share price: $23.08
The 52-week range is $18.81 to $31.08
Earnings estimates for 2011: $3.71 per share
Earnings estimates for 2012: $4.02 per share
Annual dividend: 40 cents per share which yields 1.6%
Book value: $45.93 per share

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.