Trade-Ideas: Nationstar Mortgage Holdings (NSM) Is Today's "Dead Cat Bounce" 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 Nationstar Mortgage Holdings (NSM) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Nationstar Mortgage Holdings as such a stock due to the following factors:
- NSM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.3 million.
- NSM has traded 68,087 shares today.
- NSM is up 5.2% today.
- NSM was down 5.8% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in NSM with the Ticky from Trade-Ideas. See the FREE profile for NSM NOW at Trade-IdeasMore details on NSM: Nationstar Mortgage Holdings Inc. operates as a residential mortgage loan servicer in the United States. It operates in two segments, Servicing and Originations. NSM has a PE ratio of 9.2. Currently there are 3 analysts that rate Nationstar Mortgage Holdings a buy, no analysts rate it a sell, and 5 rate it a hold.The average volume for Nationstar Mortgage Holdings has been 1.3 million shares per day over the past 30 days. Nationstar has a market cap of $3.1 billion and is part of the financial sector and real estate industry. The stock has a beta of -0.87 and a short float of 37.5% with 6.24 days to cover. Shares are down 7.3% year-to-date as of the close of trading on Thursday.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 Nationstar Mortgage Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.Highlights from the ratings report include:
- Net operating cash flow has decreased to -$292.23 million or 11.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- NSM has underperformed the S&P 500 Index, declining 12.74% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 48.7% when compared to the same quarter one year prior, rising from $55.07 million to $81.89 million.
- 44.11% is the gross profit margin for NATIONSTAR MORTGAGE HOLDINGS which we consider to be strong. Regardless of NSM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NSM's net profit margin of 11.76% is significantly lower than the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, NATIONSTAR MORTGAGE HOLDINGS's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full Nationstar Mortgage Holdings Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV