6 Fintech Stocks That Outperformed during market downturn

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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
FISV Fiserv, Inc. 25.57% -1.94%
JKHY Jack Henry & Associates Inc. 33.14% -3.46%
MSCI MSCI Inc. 28.24% -4.60%
FICO Fair Isaac Corporation 21.63% -4.66%
MRKT Markit Ltd. 11.86% -9.56%
V Visa Inc. 20.05% -11.09%
MA MasterCard Incorporated 16.89% -14.30%
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%
DH.TO DH Corporation 11.40% -28.02%
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%
SQ Square, Inc. 22.07% -33.42%
AXP American Express Company 6.64% -35.83%
WETF WisdomTree Investments, Inc. 21.74% -54.75%
WPG WP GLIMCHER Inc. 6.07% -55.82%
LC LendingClub Corporation 30.13% -66.33%
ONDK On Deck Capital, Inc. 14.44% -68.73%
MONIF Monitise plc 28.57% -92.48%
INDICES
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:

  1. 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.
  1. Jack Henry. They have some similarity to Fiserv but not so well known.
  1. MSCI. A Big data platform play that is critical to Digital Wealth Management aka the democratization of Wall Street.
  1. Fair Isaac Corporation (FICO). A Big data platform play powering lending marketplaces (despite the meme that FICO is flawed).
  1. Markit. A Big data platform play that is critical to Digital Wealth Management aka the democratization of Wall Street.
  1. Visa. Network effects rule meaning that payment challengers are challenged as we explore here.
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