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

Hudson City Bancorp

(

HCBK

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Hudson City Bancorp as such a stock due to the following factors:

  • HCBK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $108.4 million.
  • HCBK has traded 2.8 million shares today.
  • HCBK traded in a range 263.6% of the normal price range with a price range of $0.61.
  • HCBK traded below its daily resistance level (quality: 174 days, meaning that the stock is crossing a resistance level set by the last 174 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on HCBK:

Hudson City Bancorp, Inc. operates as the holding company of Hudson City Savings Bank that provides various banking products and services in the United States. The stock currently has a dividend yield of 1.7%. HCBK has a PE ratio of 29.8. Currently there are no analysts that rate Hudson City Bancorp a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Hudson City Bancorp has been 4.8 million shares per day over the past 30 days. Hudson City has a market cap of $5.0 billion and is part of the financial sector and banking industry. The stock has a beta of 0.94 and a short float of 0.9% with 0.36 days to cover. Shares are down 6.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Hudson City Bancorp as a

buy

. Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 5.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 42.64% is the gross profit margin for HUDSON CITY BANCORP INC which we consider to be strong. Regardless of HCBK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCBK's net profit margin of 12.39% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to $21.27 million or 75.15% when compared to the same quarter last year. Despite a decrease in cash flow HUDSON CITY BANCORP INC is still fairing well by exceeding its industry average cash flow growth rate of -121.56%.
  • 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. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, HUDSON CITY BANCORP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • In its most recent trading session, HCBK has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.

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