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Trade-Ideas LLC identified

MBIA

(

MBI

) as a "perilous reversal" (up big yesterday but down big today) 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 $18.2 million.
  • MBI has traded 63,453 shares today.
  • MBI is down 3.9% today.
  • MBI was up 6.3% yesterday.

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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. The company operates through U.S. Public Finance Insurance, and International and Structured Finance Insurance segments. MBI has a PE ratio of 9. Currently there is 1 analyst that rates MBIA a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for MBIA has been 2.9 million shares per day over the past 30 days. MBIA has a market cap of $952.9 million and is part of the financial sector and insurance industry. The stock has a beta of 2.29 and a short float of 16.5% with 7.37 days to cover. Shares are down 6.9% year-to-date as of the close of trading on Wednesday.

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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 deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • 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 120.2% when compared to the same quarter one year ago, falling from $173.00 million to -$35.00 million.
  • The debt-to-equity ratio is very high at 2.31 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Insurance industry and the overall market, MBIA INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for MBIA INC is currently extremely low, coming in at 4.35%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -38.04% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $8.00 million or 82.60% 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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