Today's Dead Cat Bounce Stock: Ocwen Financial (OCN)
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
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocwen Financial 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 $70.1 million.
- OCN has traded 234,932 shares today.
- OCN is up 3.2% today.
- OCN was down 16.8% yesterday.
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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 7.4. Currently there is 1 analyst that rates Ocwen Financial a buy, no analysts rate it a sell, and 6 rate it a hold.
The average volume for Ocwen Financial has been 8.7 million shares per day over the past 30 days. Ocwen Financial has a market cap of $1.2 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.78 and a short float of 25.2% with 3.41 days to cover. Shares are down 46.1% year-to-date as of the close of trading on Friday.
Analysis:
rates Ocwen Financial as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 143.32% to $348.99 million when compared to the same quarter last year. In addition, OCWEN FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -57.00%.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, OCWEN FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 73.40%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 248.71% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, OCN is still more expensive than most of the other companies in its industry.
- You can view the full Ocwen Financial Ratings Report.
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