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NASDAQ OMX Group (NDAQ) Is Today's Water-Logged And Getting Wetter 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 NASDAQ OMX Group (NDAQ) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified NASDAQ OMX Group as such a stock due to the following factors:

  • NDAQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.2 million.
  • NDAQ has traded 599,948 shares today.
  • NDAQ traded in a range 207.8% of the normal price range with a price range of $1.23.
  • NDAQ traded below its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on NDAQ:

The NASDAQ OMX Group, Inc. delivers trading, clearing, exchange technology, regulatory, securities listing, and public company services worldwide. It operates in four segments: Market Services, Listing Services, Information Services, and Technology Solutions. The stock currently has a dividend yield of 1.6%. NDAQ has a PE ratio of 14.7. Currently there are 5 analysts that rate NASDAQ OMX Group a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for NASDAQ OMX Group has been 1.9 million shares per day over the past 30 days. NASDAQ OMX Group has a market cap of $6.5 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.92 and a short float of 4.9% with 5.49 days to cover. Shares are down 4.1% year-to-date as of the close of trading on Wednesday.

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 NASDAQ OMX Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 20.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • NASDAQ OMX GROUP INC 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, NASDAQ OMX GROUP INC increased its bottom line by earning $2.24 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($2.94 versus $2.24).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 145.2% when compared to the same quarter one year prior, rising from $42.00 million to $103.00 million.

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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