Trade-Ideas LLC identified

MBIA

(

MBI

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified MBIA as such a stock due to the following factors:

  • MBI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.5 million.
  • MBI has traded 110,137 shares today.
  • MBI is trading at 2.53 times the normal volume for the stock at this time of day.
  • MBI is trading at a new low 3.06% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on MBI:

MBIA Inc. provides financial guarantee insurance services to public finance markets in the United States and internationally. It operates through three segments: U.S. Public Finance Insurance, International and Structured Finance Insurance, and Corporate. MBI has a PE ratio of 67. Currently there is 1 analyst that rates MBIA a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for MBIA has been 2.5 million shares per day over the past 30 days. MBIA has a market cap of $1.0 billion and is part of the financial sector and insurance industry. The stock has a beta of 2.30 and a short float of 15.6% with 6.70 days to cover. Shares are up 11.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates MBIA as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income, generally high debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • The share price of MBIA INC has not done very well: it is down 20.55% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • MBIA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, MBIA INC reported lower earnings of $1.04 versus $2.67 in the prior year. For the next year, the market is expecting a contraction of 53.8% in earnings ($0.48 versus $1.04).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 213.0% when compared to the same quarter one year ago, falling from $69.00 million to -$78.00 million.
  • Currently the debt-to-equity ratio of 1.80 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, MBIA INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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