Mizuho Financial – Analyzing Bearish Sentiment

By Susan Ramirez • Tuesday, March 25 15:10 • Permanent Link

During today's afternoon trading session, Mizuho Financial plummeted to $5.85 per share. It's still 5.75% above its mean target price of $5.53, so there may still be room for more downwards movement -- even after today's -1.0% drop. Analysts are giving the Banking stock on average rating of buy, with target prices ranging from 5.15 to 5.91416 dollars per share.

The market seems to share this optimistic view, since Mizuho Financial has a short interest of only 0.0% (this is the percentage of the share float that is being shorted). Each short position represents an investor's expectation that the price of the stock will decrease in the future.

Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.

One way to tell how the market is perceiving a stock is to look to its rate of institutional ownership. With their vast resources, hedge funds, pension funds, and wealth managers are able to perform due diligence to a level that most investors cannot. So it follows that their investment decisions may be more educated. But we also know that bankers and portfolio managers can make mistakes too.

So the fact that Mizuho Financial has a low rate of institutional ownership at 1.3% is not an immediate red flag. It just means that something about the company has kept institutional investors from committing -- or the stock is simply flying under their radar.

Overall, there is mixed market sentiment towards Mizuho Financial because of an analyst consensus of little upside potential, a buy rating, a very low short interest, and a very small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.

At a glance, here are some essential statistics you may want to know about MFG:

It has trailing 12 month earnings per share (EPS) of $0.47 per share
Mizuho Financial has a trailing 12 month Price to Earnings (P/E) ratio of 12.4 while the S&P 500 average is 29.3
The company has a Price to Book (P/B) ratio of 0.0 in contrast to the S&P 500's average ratio of 4.74
Mizuho Financial is a Finance company, and the sector average P/E and P/B ratios are 20.04 and 1.86 respectively

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.