The Bank of New York Mellon Corporation (BK) Succumbed To The Buyers’ Wrath

Let’s reassess the active stocks with an eye toward BK stock. Just how should we respond to Tuesday’s drubbing? Is the mighty fruit now destined to decay? Or is this a mere bruising and nothing more? On 12 February, shares of The Bank of New York Mellon Corporation (NYSE:BK) closed higher after a volatile session. The shares accumulated 0.83 points or 1.6 percent at $52.84 with a light trade volume of 4.401 million shares. After opening the session at $52.53, the shares went as high as $53.0667 and as low as $52.52, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $52.5 billion and now has 994.12 million shares outstanding. The Bank of New York Mellon Corporation (BK) stock has gained 9.9 percent of market value in 21 trading days.

BK stock has a trailing 3-year beta of 1.05, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.85 a share in the trailing twelve months. The stock’s value has surged 12.26 percent year to date (YTD) against a decline of -2.29 percent in 12 month’s time. The company’s shares still trade -9.94 percent away from its 1-year high of $58.67 and 21 percent up from 52-week low of $43.67. The average consensus rating on the company is 3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

The Bank of New York Mellon Corporation (BK) will probably climb 1.04 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $67 price as 12-month high target. This represents a whopping 26.8 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $53, which represents a return potential of 0.3 percent when compared to the closing price of the stock of $52.84 on Tuesday, February 12. The lowest price target for the stock is $46 — slightly more than -12.94 percent from BK’s current share price.

History has shown that shares in The Bank of New York Mellon Corporation have gone down on 21 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. Investors will get their next glimpse of BK’s Q1 earnings on April 18. Analysts are forecasting revenue to suffer decline of -3.9 percent to $4.02B in the fiscal first quarter, while earnings are seen soaring by nearly -10.91 percent to $0.98 per share. It earned $0.99 per share, better than the $0.92, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $4.01B, worse than the $4.02B analysts expected. Earnings are estimated to increase by -3.4 percent this year, 8.77 percent next year and continue to increase by 9.43 percent annually for the next 5 years.

Let’s take a look at some insider activity at The Bank of New York Mellon Corporation (NYSE:BK) and see the pattern. The earliest insider trade took place on 01/28/2019. Trian Fund Management, L.P. parted with a total of 2.11 million shares of company at average share price of $53.48. The total for the sales was set at $112.68 million. After this transaction, the Director account balance stood at 14.02 million shares. The stock lost -1.2 percent since that insider sale. On 05/11/2018, Kurimsky Kurtis R., Controller, sold 4.7 thousand shares at a price per share of $57.44. This removed 270.03 thousand shares from the insider’s fortune and the stock saw a -8.01 percent retreat in value since the news became public. This transaction left 16.49 thousand shares in the Controller account.

On 04/23/2018, Sr. Executive Vice President Harris Mitchell E. performed a sale transaction worth $2.69 million. This sale at $56 each has eliminated 48 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -5.64 percent decrease since the transaction was reported. The insider now is left with 150.6 thousand shares remaining in the account. Mccarthy J Kevin, who performs the SEVP & General Counsel job, sold 15 thousand shares for $838.35 thousand. The disposal occurred on 04/23/2018 was priced at $55.89 per share. The share price plunged -5.46 percent since the reporting date. Mccarthy J Kevin now left with a stake of 100.61 thousand BK stock worth $5.32 million after the insider selling.

The stock is currently hovering around the first support level of $52.55. Below this, the next support is placed in the zone of $52.26. Till the time, the BK stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 62.53 on daily chart, which may remain a cause for concern. If the price breaks below $52.26 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $53.1 mark may result into a pull-back move towards $53.36 level.

Shares of The Bank of New York Mellon Corporation (BK) are trading at a P/E ratio of 13.52 times earnings reported for the past 12 months. The industry BK operates in has an average P/E of 242.78. Its P/E ratio went as low as 12.21X and as high as 18.83 over the 5-year span.Further, it is sporting a 8.17 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8.41.