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.

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 $28.1 million.
  • NSM has traded 318,702 shares today.
  • NSM is trading at 6.56 times the normal volume for the stock at this time of day.
  • NSM is trading at a new high 3.02% 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:

TheStreet Recommends

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. NSM has a PE ratio of 1. Currently there are 3 analysts that rate Nationstar Mortgage Holdings a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Nationstar Mortgage Holdings has been 1.5 million shares per day over the past 30 days. Nationstar has a market cap of $1.8 billion and is part of the financial sector and real estate industry. The stock has a beta of 2.16 and a short float of 46.9% with 7.44 days to cover. Shares are down 39% 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

hold

. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • NSM, with its decline in revenue, slightly underperformed the industry average of 8.5%. Since the same quarter one year prior, revenues fell by 17.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 52.7% in earnings ($1.16 versus $2.44).
  • 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 301.0% when compared to the same quarter one year ago, falling from $24.04 million to -$48.32 million.
  • 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. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, NATIONSTAR MORTGAGE HOLDINGS's return on equity is below that of both the industry average and the S&P 500.

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