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Trade-Ideas LLC identified

National Penn

(

NPBC

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

  • NPBC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.9 million.
  • NPBC has traded 2.5 million shares today.
  • NPBC is up 3.4% today.
  • NPBC was down 7.5% yesterday.

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More details on NPBC:

National Penn Bancshares, Inc. operates as the bank holding company for National Penn Bank that provides commercial and consumer banking products and services to residents and businesses primarily in eastern and central Pennsylvania. The stock currently has a dividend yield of 3.8%. NPBC has a PE ratio of 15. Currently there is 1 analyst that rates National Penn a buy, 1 analyst rates it a sell, and 4 rate it a hold.

TheStreet Recommends

The average volume for National Penn has been 1.3 million shares per day over the past 30 days. National Penn has a market cap of $1.6 billion and is part of the financial sector and banking industry. The stock has a beta of 0.64 and a short float of 7.2% with 3.92 days to cover. Shares are down 13.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates National Penn as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, expanding profit margins, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • NATIONAL PENN BANCSHARES INC has improved earnings per share by 17.6% 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, NATIONAL PENN BANCSHARES INC increased its bottom line by earning $0.78 versus $0.70 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus $0.78).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 17.9% when compared to the same quarter one year prior, going from $24.48 million to $28.85 million.
  • The gross profit margin for NATIONAL PENN BANCSHARES INC is currently very high, coming in at 93.56%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.45% significantly outperformed against the industry average.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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