Please ensure Javascript is enabled for purposes of website accessibility

Why Nasdaq, Euronet, and SVB Financial Stocks Fell Today

By Rich Smith - Updated Mar 12, 2020 at 6:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It wasn't just "the Nasdaq" that declined. It was Nasdaq, Inc.

What happened

No two ways about it, Nasdaq stocks had a bad day today, falling 9.4% by close of trading -- and not just "Nasdaq stocks," but that most Nasdaq-y of Nasdaq stocks, Nasdaq (NDAQ 0.59%) the stock, which closed down 10.3%.

Meanwhile, electronic payments and transactions processor Euronet Worldwide (EEFT 2.01%) fell 12.8%, and banker SVB Financial (SIVB 5.78%) was down 7.9%.

Man crouching and holding head under a falling stock chart

Image source: Getty Images.

So what

What do these three stocks have in common? All are, of course, broadly considered "financial" stocks, and when stock markets fall broadly, as they did today, investors may naturally extrapolate that weakness to the financial system in general and start selling financial stocks en masse.

And yet, it's notable that none of the three companies named above had any bad news of their own to report. To the contrary, the only actual news I can find discussing any of the three is news of a positive sort: This morning, Bank of America took one look at how far Nasdaq, Inc., had fallen in the past three weeks (down 15%), and decided it was finally time to upgrade the stock to "buy."

Now what

That decision by one big banker didn't prevent the rest of Wall Street, however, from deciding to "sell" Nasdaq instead. It didn't prevent a stock that was down 15% already from falling another 10%.

And that may be the real lesson investors need to draw here. Just as weak or nonexistent profits didn't prevent investors from buying shares in sexy, fast-growing tech companies despite their increasingly disturbingly stratospheric valuations during the bull market, it may take more than simply an improved stock valuation and an endorsement from a big bank to attract buyers back into Nasdaq stock again (or into Euronet or SVB Financial, either).

For savvy buyers, though, this can present an opportunity to buy stocks at bargain prices when no one else wants them. After today's market rout, for example, Nasdaq, Inc., shares are selling for less than 19 times trailing earnings, Euronet costs less than 14, and SVB Financial looks positively enticing at a mere 6.3 P/E.

The right time to get greedy, as the saying goes, is when others are fearful -- and the fear is positively palpable today.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nasdaq, Inc. Stock Quote
Nasdaq, Inc.
NDAQ
$147.50 (0.59%) $0.87
Euronet Worldwide, Inc. Stock Quote
Euronet Worldwide, Inc.
EEFT
$116.45 (2.01%) $2.29
SVB Financial Group Stock Quote
SVB Financial Group
SIVB
$452.72 (5.78%) $24.74
Bank of America Corporation Stock Quote
Bank of America Corporation
BAC
$35.84 (0.53%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
332%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.