In this Research Note we look at the Daily Fintech Index to see which publicly traded Fintech stocks held up best after the hammering that stocks took recently and look at 6 that outperformed in relative terms and which ones got hammered the most.
In this version of the Daily Fintech Index we order based on 52 week High. We also show 52 week Low, but in a bear market when fear beats greed traders and media tend to focus on the negative which is how far off the stock is from a 52 week High (even though your statistical chance of having actually bought at either the 52 week High or Low is nudging zero).
Finally we show an ETF of Bank stocks (the Fin) and an ETF of Tech stocks as comparison.
The snapshot (taken Feb 18) below is ranked based on how individual stocks performed against 52 week High.
|SYMBOL||NAME||% FROM LOW||% FROM HIGH|
|JKHY||Jack Henry & Associates Inc.||33.14%||-3.46%|
|FICO||Fair Isaac Corporation||21.63%||-4.66%|
|PYPL||PayPal Holdings, Inc.||21.20%||-14.55%|
|FDS||FactSet Research Systems Inc.||8.75%||-16.61%|
|VIRT||Virtu Financial, Inc.||9.57%||-17.19%|
|SSNC||SS&C Technologies Holdings||22.44%||-25.08%|
|IBKR||Interactive Brokers Group, Inc.||11.93%||-28.14%|
|AMTD||TD Ameritrade Holding Corp||11.98%||-28.66%|
|ETFC||E*TRADE Financial Corporation||13.62%||-29.22%|
|SCHW||The Charles Schwab Corporation||13.81%||-31.47%|
|ACIW||ACI Worldwide, Inc.||16.12%||-32.17%|
|AXP||American Express Company||6.64%||-35.83%|
|WETF||WisdomTree Investments, Inc.||21.74%||-54.75%|
|WPG||WP GLIMCHER Inc.||6.07%||-55.82%|
|ONDK||On Deck Capital, Inc.||14.44%||-68.73%|
|IYW||iShares US Technology||34.54%||-11.52%|
|VFH||Vanguard Financials ETF||37.58%||-16.99%|
First, because these are gloomy times, we looked at the bottom of the list to see who got hammered the most. Monitise, which is down over 90% from its 52 week high, stands at the top of that unenviable position. We looked at Monitise here.
Lending marketplaces also got hammered with Lending Club and Ondeck down 66% and 68% respectively. I think that is overdone because the model is sound and gives them headwinds; those stocks could reward brave bottom pickers.
We then looked at the 6 Fintech stocks that beat both the Tech and Fin ETFs to see if the market is offering us any pearls of wisdom:
- Fiserv. We looked at Fiserv nearly a year ago with a simple takeaway – don’t bet against these guys. Sure this looks like Traditional Fintech (boring) vs Emergent Fintech (exciting) but the fundamentals tell a different story. Possibly this is because Fiserv serve small banks not big banks which means sticky revenue and great visibility. We explore small banks vs big banks here.
- Jack Henry. They have some similarity to Fiserv but not so well known.
- MSCI. A Big data platform play that is critical to Digital Wealth Management aka the democratization of Wall Street.
- Fair Isaac Corporation (FICO). A Big data platform play powering lending marketplaces (despite the meme that FICO is flawed).
- Markit. A Big data platform play that is critical to Digital Wealth Management aka the democratization of Wall Street.