Question

pitch me a stock in finance industry. Please include fundamental analysis for industry, the company and the economy environment.

Answer 1

PNC FINANCIAL SERVICES GROUP (NYSE - PNC)

After a thorough technical and fundamental analysis of the market across the industry, I choose PNC based on following fundamental analysis. But before that, let us understand the company and the economics of the industry and its especiallity.

PNC is a very diversified company in the finance industry whose product and services ranges from Retail Banking, Corporate & Institutional Banking, BlackRock, and Asset Management Group. BlackRock engages in Investment, Risk management and technology services.

Recently PNC has also diluted 22% of its holding in BlackRock, thus enabling itself cash rich for any debt mitigation or further expansion.

Fundamental Analysis:

The factors to be primarily noted are

1. ROIC (Return on Invested capital) which is 0.0294 (Remark - for every $100 employed, $3 is the return which is good for a finance industry).  

2. Debt to Equity Ration is 91 (Remark - Debt is actually good for finance industry and banking system).

3. Dividend paying company (Remark - Even if there is no growth in the stock price, dividend will give the required return).

4. Available Price - $113 per share - Evenafter performing very well, this stock has still not appreciated much and there is a further room for a growth of another 10-30 % in the near terms.

5. High beta - 1.36 - High beta is the indicator for volatility. And anything above 1 is good and good volatility gives an opportunity to enter and exit a number of times.

So, based on the above analysis, PNC is a good to invest at this time.