Trade-Ideas LLC identified

LendingClub

(

LC

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified LendingClub as such a stock due to the following factors:

  • LC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.0 million.
  • LC has traded 1.8 million shares today.
  • LC is up 3.2% today.
  • LC was down 7.1% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in LC with the Ticky from Trade-Ideas. See the FREE profile for LC NOW at Trade-Ideas

More details on LC:

LendingClub Corporation, together with its subsidiaries, operates as an online marketplace that connects borrowers and investors in the United States. Currently there are 8 analysts that rate LendingClub a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for LendingClub has been 6.6 million shares per day over the past 30 days. LendingClub has a market cap of $3.2 billion and is part of the financial sector and financial services industry. Shares are down 30.1% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates LendingClub as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 4.39 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • LC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 60.48%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Consumer Finance industry and the overall market, LENDINGCLUB CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LENDINGCLUB CORP is rather high; currently it is at 58.48%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LC's net profit margin of 1.53% significantly trails the industry average.
  • Net operating cash flow has increased to $21.39 million or 47.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.68%.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.