Ameriprise: Zacks’ Bear of the Day Play

For obvious reasons, I’m hoping this market rally can continue. First, I like feeling rich. Second, my livelihood has direct ties to the market. But sometimes a bullish market gets too bullish across too many parts of the market. Often, that bullish attitude inflates the prices of equities that maybe shouldn’t have ran up as high as they did. This may be the case with today’s Bear of the Day, Ameriprise Financial (AMPAnalyst Report).

I have great admiration for Ameriprise as a company. The company was known as American Express Financial Advisors before a spinoff made them Ameriprise Financial. I owe my very existence in this business to AEFA as we affectionately called it. But like my old boss used to say, “That and a dollar will get you on the bus.” Lately, analysts haven’t been too bullish on the long term prospects of this financial services firm.

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Five analysts have dropped their earnings estimates for the current quarter, while six have done so for the current year. That’s in contrast to only one analyst increasing estimates. The bearish sentiment on Wall Street has dropped the Zacks Consensus Estimate for the current quarter from $2.52 to $2.35. The current year numbers had plummeted from $9.43 to $9.20. As a result, the stock price has come under pressure lately.

Click “FOLLOW THE AUTHOR” above for free stock picks!!! And Twitter @bartosiastics

After reaching a high near $138 in February, shares began to drop slowly. One by one support levels gave way until the real sharp drop in the market during August. In just about a week, AMP shares dropped from $124 down to $95 intraday on August 24th. The retest during September took shares to just above $102. Since then, a bit of a relief rally has shares approaching the $115 level but the chart looks a bit overbought here with a commodity channel index that pushed above 200.

Investors looking for other stocks within the same industry should take a look at Zacks Rank #1 (Strong Buy) Monroe Capital (MRCCSnapshot Report) and Zacks Rank #2 (Buy) stocks Medley Management (MDLYSnapshot Report).

David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”

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