Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Franklin Resources as such a stock due to the following factors:
- BEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $80.7 million.
- BEN has traded 477,009 shares today.
- BEN is trading at 2.47 times the normal volume for the stock at this time of day.
- BEN crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on BEN:
Franklin Resources Inc. is a publicly owned asset management holding company. The firm provides its services to individuals, institutions, pension plans, trusts, and partnerships. It manages, through its subsidiary, separate client-focused equity, fixed income, and balanced portfolios. The stock currently has a dividend yield of 0.8%. BEN has a PE ratio of 16.3. Currently there are 4 analysts that rate Franklin Resources a buy, no analysts rate it a sell, and 9 rate it a hold.
The average volume for Franklin Resources has been 1.6 million shares per day over the past 30 days. Franklin has a market cap of $35.8 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.79 and a short float of 1.8% with 3.65 days to cover. Shares are down 2.9% year-to-date as of the close of trading on Wednesday.
rates Franklin Resources as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- BEN's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 4.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 39.00% is the gross profit margin for FRANKLIN RESOURCES INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.70% is above that of the industry average.
- FRANKLIN RESOURCES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FRANKLIN RESOURCES INC increased its bottom line by earning $3.36 versus $2.98 in the prior year. This year, the market expects an improvement in earnings ($3.78 versus $3.36).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Capital Markets industry and the overall market, FRANKLIN RESOURCES INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- You can view the full Franklin Resources Ratings Report.