Trade-Ideas LLC identified

Nationstar Mortgage Holdings

(

NSM

) as a weak 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 $14.4 million.
  • NSM has traded 67,295 shares today.
  • NSM is trading at 2.49 times the normal volume for the stock at this time of day.
  • NSM is trading at a new low 3.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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. NSM has a PE ratio of 8. Currently there are 3 analysts that rate Nationstar Mortgage Holdings a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Nationstar Mortgage Holdings has been 1.1 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 1.94 and a short float of 55.9% with 11.50 days to cover. Shares are down 51.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Nationstar Mortgage Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.2%. Since the same quarter one year prior, revenues rose by 19.6%. 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.
  • Net operating cash flow has significantly increased by 69.45% to $363.17 million when compared to the same quarter last year. Despite an increase in cash flow of 69.45%, NATIONSTAR MORTGAGE HOLDINGS is still growing at a significantly lower rate than the industry average of 119.97%.
  • Looking at the price performance of NSM's shares over the past 12 months, there is not much good news to report: the stock is down 56.35%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 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. 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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