Seven Financial Stocks With Strong Momentum Going Into Earnings

Earnings season is upon us, and a variety of financial companies announce this week. One thing I pay attention to going into earnings season is momentum. There are many ways to measure momentum, but this post focuses on sentiment momentum and out performance momentum. At the end of this post, I have listed seven financials that exhibit strong momentum, and announce earnings this week.

One way to measure sentiment momentum is via earnings estimate revisions. Many quant models consider upward earnings estimate revisions to be a positive signal going into an earnings announcement.

Earnings estimate out performance history is another way to measure momentum. Specifically, has a stock beat earning estimates in previous quarters? I am familiar with quant models that use this factor, and I pay close attention to it when I add stocks to my own personal portfolio.

I have assembled a list of seven financial sector stocks that announce earnings this week and exhibit strong momentum. Specifically, all seven of the stocks on the list have beat earnings estimates in at least the last quarter, and they have had upward earnings estimate revisions in the last 30 days.

Personally, I never invest based on momentum alone, but it is an interesting factor to follow. I look forward to watching how these seven financials perform following their earnings announcements this week:

Merrill Lynch (MER)
Bank of America (BAC)
Wachovia Corp (WB)
First Mutual Bancshares (FMSB)
Jefferies Group (JEF)
State Street (STT)
Northern Trust (NTRS)