We Rated These European Bank Stocks SELL. Here’s Why

The past came back to haunt Deutsche Bank AG last Friday, when the U.S. Justice Department asked for $14 billion to settle claims for selling sub-prime residential mortgage backed securities to investors as a high-quality debt. In addition to the U.S. mortgage claims, Deutsche faces regulatory probes on foreign currency manipulation and precious metal trading.

Deutsche Bank AG stock has been a SELL since October, 2015. It dropped from a D to D- one month after the Brexit, and now there are more problems on the horizon, with the possibility of paying large settlement amounts.

Deutsche stock dropped 9 percent in the early trading hours last Friday, finishing the day and the week down 9.3 and 11.4 percent, respectively.

The bad news wasn’t bad for Deutsche alone. The ripple effect hit other major, already hurting and SELL rated, European banks.

D rated Royal Bank of Scotland dipped 5.8 percent on Friday--it was down 9.5 percent for the week trading at $4.86 per share.

Credit Suisse Group AG, also a D rated stock, declined 4.7 percent in value, closing the week down 5.5 percent at $13.09 per share.

Barclays PLC held a SELL investment rating since October, 2015 with a current D rating. Its stock finished the day down 4.6 percent and down 6.5 percent for the week at $8.58 per share.

Each of the above bank’s ratings history indicates our recommendation to sell months ago, and for some banks, as long as over a year ago. Using our comparison tool, we set these banks side by side to take a look at their current position.

More bad news is the last thing these banks needed. The United Kingdom’s Brexit was bad enough for them, but now, a mistake by one major player brings hardship to the rest.

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