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Trade-Ideas: Blackstone Group (BX) Is Today's Momo Momentum Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Blackstone Group ( BX) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Blackstone Group as such a stock due to the following factors:

  • BX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $157.5 million.
  • BX has a PE ratio of 22.7.
  • BX is currently in the upper 30% of its 1-year range.
  • BX is in the upper 25% of its 20-day range.
  • BX is in the upper 35% of its 5-day range.
  • BX is currently trading above yesterday's high.
  • BX has experienced a gap between today's open and yesterday's close of 0.4%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on BX:

The Blackstone Group L.P. is a publicly owned investment manager. The firm also provides financial advisory services to its clients. It provides its services to public and corporate pension funds, academic, cultural, and charitable organizations. The stock currently has a dividend yield of 4.3%. BX has a PE ratio of 22.7. Currently there are 8 analysts that rate Blackstone Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Blackstone Group has been 4.6 million shares per day over the past 30 days. Blackstone Group has a market cap of $13.9 billion and is part of the financial sector and financial services industry. The stock has a beta of 2.07 and a short float of 1.7% with 1.64 days to cover. Shares are up 58.4% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Blackstone Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • BX's very impressive revenue growth greatly exceeded the industry average of 12.1%. Since the same quarter one year prior, revenues leaped by 129.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 357.14% and other important driving factors, this stock has surged by 81.38% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • BLACKSTONE GROUP LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BLACKSTONE GROUP LP turned its bottom line around by earning $0.40 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($2.39 versus $0.40).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 381.7% when compared to the same quarter one year prior, rising from -$74.96 million to $211.15 million.
  • Net operating cash flow has increased to $236.25 million or 11.38% when compared to the same quarter last year. In addition, BLACKSTONE GROUP LP has also modestly surpassed the industry average cash flow growth rate of 5.52%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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