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Trade-Ideas: Ocwen Financial Corporation (OCN) Is Today's Post-Market Leader 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 Ocwen Financial Corporation ( OCN) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocwen Financial Corporation as such a stock due to the following factors:

  • OCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $128.6 million.
  • OCN is up 5.9% today from today's close.

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More details on OCN:

Ocwen Financial Corporation, through its subsidiaries, is engaged in the servicing and origination of mortgage loans in the United States and internationally. OCN has a PE ratio of 20.1. Currently there are 6 analysts that rate Ocwen Financial Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Ocwen Financial Corporation has been 3.6 million shares per day over the past 30 days. Ocwen Financial has a market cap of $5.3 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.46 and a short float of 6% with 2.16 days to cover. Shares are down 30% year-to-date as of the close of trading on Monday.

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 Ocwen Financial Corporation as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, robust revenue growth and notable return on equity. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:

  • The revenue growth, albeit very impressive, significantly trails the industry average of 245.4%. Since the same quarter one year prior, revenues leaped by 140.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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, OCWEN FINANCIAL CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for OCWEN FINANCIAL CORP is currently very high, coming in at 80.67%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.58% trails the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • Net operating cash flow has significantly decreased to -$153.29 million or 140.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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