10 Bank Stocks Failing Our Test

The results of the Federal Reserve’s “stress tests” for banks show a number of financial stocks on the mend — but also some stocks that aren’t winning any friends over at the central bank.

I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. After performing my own “stress tests” this week, I’ve identified 10 financial stocks to sell.

Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.” Here they are:

Goldman Sachs Group Inc. (NYSE:GS) is a bank holding and a financial holding company based in New York City. GS stock has posted a loss of 22% in the last year, compared to a gain of 9% for the Dow Jones in the same time. GS stock gets an “F” grade for sales growth, a “D” grade for operating margin growth, a “D” grade for earnings growth, a “D” grade for earnings momentum, a “D” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for return on equity. For more information, view my complete analysis of GS stock.

UBS (NYSE:UBS) offers wealth management, asset management and investment banking services. In the last year, UBS is down 24%. UBS stock gets an “F” grade for sales growth, a “D” grade for operating margin growth, a “D” grade for earnings growth, a “D” grade for earnings momentum, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, and a “D” grade for the magnitude in which earnings projections have increased over the past months. For more information, view my complete analysis of UBS stock.

Credit Suisse Group (NYSE:CS) is a global financial services company that posted a significant loss of 34% in the last 12 months. Credit Suisse stock gets an “F” grade for sales growth, a “D” grade for operating margin growth, a “D” grade for earnings growth, an “F” grade for earnings momentum, a “D” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for return on equity. For more information, view my complete analysis of CS stock.

Deutsche Bank (NYSE:DB) is a global investment bank that offers various investment, financial and related products and services. Since last March, DB stock is down 18%. DB stock gets an “F” grade for sales growth, an “F” grade for its ability to exceed the consensus earnings estimates on Wall Street, and a “D” grade for the magnitude in which earnings projections have increased over the past months. For more information, view my complete analysis of DB stock.

Morgan Stanley (NYSE:MS) provides financial services and products to corporations, governments, financial institutions and individuals. MS stock has slid 33%  in 2011. MS stock gets a “D” grade for sales growth, a “D” grade for operating margin growth, an “F” grade for earnings growth, a “D” grade for the magnitude in which earnings projections have increased over the past months, and a “D” grade for return on equity. For more information, view my complete analysis of MS stock.