The Finance group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. HSBC (HSBC) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Finance peers, we might be able to answer that question.
HSBC is one of 853 companies in the Finance group. The Finance group currently sits at #15 within the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. HSBC is currently sporting a Zacks Rank of #1 (Strong Buy).
Over the past 90 days, the Zacks Consensus Estimate for HSBC's full-year earnings has moved 1.5% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Based on the latest available data, HSBC has gained about 20.5% so far this year. Meanwhile, the Finance sector has returned an average of 5.4% on a year-to-date basis. This means that HSBC is outperforming the sector as a whole this year.
Another Finance stock, which has outperformed the sector so far this year, is The Bank of East Asia Ltd. (BKEAY). The stock has returned 14.8% year-to-date.
In The Bank of East Asia Ltd.'s case, the consensus EPS estimate for the current year increased 31.9% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, HSBC belongs to the Banks - Foreign industry, a group that includes 64 individual companies and currently sits at #60 in the Zacks Industry Rank. Stocks in this group have gained about 10.3% so far this year, so HSBC is performing better this group in terms of year-to-date returns. The Bank of East Asia Ltd. is also part of the same industry.
Investors with an interest in Finance stocks should continue to track HSBC and The Bank of East Asia Ltd. These stocks will be looking to continue their solid performance.
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