If you’re muting your TV to stop listening to all the financial media hysteria then this list may interest you. Now let’s all face the cold hard reality that consistently forecasting the global economy & stock market correctly is a tough job. Even Warren Buffett doesn’t really do it. Instead, he focuses on searching for value when the markets are in disarray, buys where he believes positive country fundamentals outweigh short-term risks, and keeps an eye on the long-term even in his old age. So why focus on uncertainty when one can just focus on the opportunity of market turmoil?
The P/E ratio is a price-multiple ratio that paints a picture on how much investors are willing to pay per dollar of earnings. A high P/E ratio generally illustrates an expectation from investors that earnings growth should increase. The lower the P/E ratio the more “value” an investor should be able to attain but that’s easier said than done.
We screened for financial services companies that had explosive earnings growth over the last year (1-year EPS growth>20%). From this narrowed pool we then screened for companies that had a P/E ratio of less than 10. We did not screen out any market caps.
The list is ranked from highest to lowest by 1-year EPS growth:
1. KKR Financial Corporation (KFN)
Sector | Financial Services |
Industry | Asset Management |
Market Cap | $1,418 million |
Beta | 3.08 |
Analyst Sentiment | 6/6 -List Buy/Outperform (Bullish) |
The company invests while using leverage to generate competitive risk-adjusted returns in multiple asset classes. The firm’s P/E ratio is 3.76. KFN’s EPS 1-year growth is 364.00%. The short interest is 4.20% as of 7/29/2011.
2. CNO Financial Group, Inc. (CNO)
Sector | Financial Services |
Industry | Insurance - Life |
Market Cap | $1,452 million |
Beta | 2.74 |
Analyst Sentiment | 4/6– List Hold/ Neutral (Neutral) |
The company develops, sells, and manages annuities, individual life insurance, supplemental health insurance, and other insurance related items. The firm’s P/E ratio is 5.40. CNO’s EPS 1-year growth is 120.00%. The short interest is 10.00% as of 7/29/2011.
3. M&T Bank Corp (MTB)
Sector | Financial Services |
Industry | Banks - Regional - US |
Market Cap | $9,174 million |
Beta | 0.75 |
Analyst Sentiment | 15/23 -List Hold/Neutral (Neutral) |
The company offers corporations, institutions, and individuals with retail & commercial banking services. The firm’s P/E ratio is 9.50. TICKER EPS 1-year growth is 96.89%. The short interest is 2.80% as of 7/29/2011.
4. Ares Capital Corporation (ARCC)
Sector | Financial Services |
Industry | Asset Management |
Market Cap | $2,944 million |
Beta | 2.01 |
Analyst Sentiment | 13/15 – List Buy/Outperform (Neutral) |
The company provides commercial & retail banking services to institutions, corporations, and individuals. The firm’s P/E ratio is 6.44 ARCC EPS 1-year growth is 96.48%. The short interest is 1.70% as of 7/29/2011.
5. Bbva Banco Frances,S.A. (BFR)
Sector | Banks - Regional - Latin America |
Industry | Financial Services |
Market Cap | $1,520 million |
Beta | 1.63 |
Analyst Sentiment | 4/5 – List Hold/ Neutral (Neutral) |
The company provides banking services to corporate and retail clients within Argentina. The firm’s P/E ratio is 5.12. BFR’s EPS 1-year growth is 51.70% The short interest is N/A.
6. Reinsurance Group of America (RGA)
Sector | Financial Services |
Industry | Insurance - Reinsurance |
Market Cap | $3,739 million |
Beta | 1.22 |
Analyst Sentiment | 6/8 -List Buy/Outperform (Bullish) |
The company sells a variety of insurance & reinsurance products. The firm’s P/E ratio is 6.07. RGA’s EPS 1-year growth is 38.56%. The short interest is 1.10% as of 7/29/2011.
7. Nelnet, Inc. (NNI)
Sector | Financial Services |
Industry | Credit Services |
Market Cap | $928 million |
Beta | 1.34 |
Analyst Sentiment | 2/3 – List Hold / Neutral (Neutral) |
The Company provides education financing services to schools, families, & students. The firm’s P/E ratio is 5.25. NNI’s EPS 1-year growth is 37.05%. The short interest is 3.50% as of 7/29/2011.
8. Torchmark Corporation (TMK)
Sector | Financial Services |
Industry | Insurance - Life |
Market Cap | $3,799 million |
Beta | 1.76 |
Analyst Sentiment | 5/14 -List Bearish/Underperform (Slightly Bearish) |
The Company is involved with a variety nonparticipating ordinary life insurance and insurance related products. The firm’s P/E ratio is 7.77. TMK’s EPS 1-year growth is 36.77. The short interest is 3.00% as of 7/29/2011.
9. Infinity Property and Casualty (IPCC)
Sector | Financial Services |
Industry | Insurance - Property & Casualty |
Market Cap | $563 million |
Beta | 1.11 |
Analyst Sentiment | 5/5 – List Hold / Neutral (Neutral) |
The company offers nonstandard auto insurance for individuals all over the US. The firm’s P/E ratio is 7.5. IPCC’s EPS 1-year growth is 36.54%. The short interest is 3.30% as of 7/29/2011.
10. CNinsure, Inc. (CISG)
Sector | Financial Services |
Industry | Insurance Brokers |
Market Cap | $657 million |
Beta | 1.20 |
Analyst Sentiment | 3/7 -List Buy/Outperform (Bullish) |
The company is an independent insurance intermediary company operating within China. The firm’s P/E ratio is 9.48. CISG’s EPS 1-year growth is 31.56%. The short interest is N/A.
We hope this helps investors as they do their own due diligence on financial companies that have explosive earnings and are cheaper given recent market movements.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
