Trade-Ideas: Charles Schwab (SCHW) 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 Charles Schwab (SCHW) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Charles Schwab as such a stock due to the following factors:
- SCHW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $211.0 million.
- SCHW has a PE ratio of 34.5.
- SCHW is currently in the upper 30% of its 1-year range.
- SCHW is in the upper 25% of its 20-day range.
- SCHW is in the upper 35% of its 5-day range.
- SCHW is currently trading above yesterday's high.
- SCHW has experienced a gap between today's open and yesterday's close of 0.5%.
'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.EXCLUSIVE OFFER: Get the inside scoop on opportunities in SCHW with the Ticky from Trade-Ideas. See the FREE profile for SCHW NOW at Trade-IdeasMore details on SCHW: The Charles Schwab Corporation, through its subsidiaries, provides securities brokerage, banking, money management, and financial advisory services. The company operates through two segments, Investor Services and Advisor Services. The stock currently has a dividend yield of 0.9%. SCHW has a PE ratio of 34.5. Currently there are 2 analysts that rate Charles Schwab a buy, 3 analysts rate it a sell, and 7 rate it a hold.The average volume for Charles Schwab has been 7.0 million shares per day over the past 30 days. Charles Schwab has a market cap of $35.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.57 and a short float of 2.9% with 4.02 days to cover. Shares are up 3.6% 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 Charles Schwab as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 17.4%. Since the same quarter one year prior, revenues rose by 13.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SCHWAB (CHARLES) CORP 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, SCHWAB (CHARLES) CORP increased its bottom line by earning $0.78 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.78).
- 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 51.2% when compared to the same quarter one year prior, rising from $211.00 million to $319.00 million.
- 38.73% is the gross profit margin for SCHWAB (CHARLES) CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.86% is above that of the industry average.
- Powered by its strong earnings growth of 53.33% and other important driving factors, this stock has surged by 55.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Charles Schwab 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.
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