Trade-Ideas LLC identified

Nationstar Mortgage Holdings

(

NSM

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

  • NSM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.4 million.
  • NSM has traded 130,939 shares today.
  • NSM is trading at 2.10 times the normal volume for the stock at this time of day.
  • NSM is trading at a new high 3.08% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 NSM:

Nationstar Mortgage Holdings Inc. provides servicing, origination, and transaction based services to single-family residences in the United States. It operates in three segments: Servicing, Originations, and Solutionstar. Currently there is 1 analyst that rates Nationstar Mortgage Holdings a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Nationstar Mortgage Holdings has been 1.0 million shares per day over the past 30 days. Nationstar has a market cap of $1.5 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.72 and a short float of 63.9% with 7.70 days to cover. Shares are down 55.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Nationstar Mortgage Holdings as a

sell

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

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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 159.6% when compared to the same quarter one year ago, falling from $111.23 million to -$66.34 million.
  • 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. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, NATIONSTAR MORTGAGE HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NATIONSTAR MORTGAGE HOLDINGS is currently extremely low, coming in at 14.57%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -13.01% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.62%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 150.81% compared to the year-earlier 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.
  • NATIONSTAR MORTGAGE HOLDINGS 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NATIONSTAR MORTGAGE HOLDINGS increased its bottom line by earning $2.44 versus $2.41 in the prior year. For the next year, the market is expecting a contraction of 104.9% in earnings (-$0.12 versus $2.44).

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