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Three of the biggest gaining financial stocks are insurance companies and a fourth stock is a beaten-down fintech that gained after July's inflation data came in better than expected. July's CPI report also showed that insurance prices increased during the month.
Lemonade (NYSE:LMND) shares jumped 33% during the week after the AI-driven insurer posted a smaller-than-expected Q2 loss and mapped out its path to profitability;
Jackson Financial (NYSE:JXN), the financial stock with the next biggest weekly increase (+20%), even after its Q2 adjusted operating EPS of $2.52, which included the negative $238M impact of notable items, declined from $6.74 in the year-ago quarter. The company, which was spun off from Prudential Plc (PUK) in 2021, returned $116M to shareholders during the quarter;
Goosehead Insurance (NASDAQ:GSHD) saw its stock gain 19%;
Upstart Holdings (NASDAQ:UPST), which uses AI to help banks make lending decisions, posted weaker-than-expected Q2 results, but its shares jumped 17% for the week with the help of the a decent inflation report and bets that the Fed will become less aggressive in raising rates. Note that YTD, the stock is still down 77%; and
American Equity Investment Life (AEL) climbed 17% for the week after posting stronger-than-expected Q2 earnings.
For the financial stocks that dropped the most, three are fintechs that are based outside the U.S. Brazil-based XP Inc. (XP) slid 17% for the week after Q2 profit was hurt by investments and JPMorgan downgraded the stock to Neutral;
Carlyle Group (CG) fell 7.3% for the week when the private equity abruptly announced that its CEO Kewsong Lee is leaving, after almost five years as its chief executive;
Shanghai-based Lufax Holding (LU) dropped 6.1%;
Brazilian fintech Nu Holding (NYSE:NU), known as Nu Bank, fell 5.4%; and
Seacoast Banking Corp. of Florida (SBCF) dipped 4.1% after agreeing to acquire Florida's Professional Bank in a transaction valued at $488.6M.
SA contributor Bert Hochfeld sees short-term pain at Upstart (UPST) worth the long-term potential for its model