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 $13.0 million.
  • NSM has traded 79,355 shares today.
  • NSM is trading at 2.03 times the normal volume for the stock at this time of day.
  • NSM is trading at a new low 3.20% 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 primarily to single-family residences in the United States. It operates in three segments: Servicing, Originations, and Xome. NSM has a PE ratio of 34. Currently there is 1 analyst that rates Nationstar Mortgage Holdings a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Nationstar Mortgage Holdings has been 1.2 million shares per day over the past 30 days. Nationstar has a market cap of $1.4 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.62 and a short float of 67.3% with 14.22 days to cover. Shares are down 11.2% year-to-date as of the close of trading on Monday.

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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 generally disappointing historical performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:

  • NSM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 58.80%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • 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 on the basis of return on equity, NATIONSTAR MORTGAGE HOLDINGS underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • NATIONSTAR MORTGAGE HOLDINGS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, NATIONSTAR MORTGAGE HOLDINGS reported lower earnings of $0.27 versus $2.44 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $0.27).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 315.1% when compared to the same quarter one year prior, rising from $19.00 million to $78.88 million.
  • 40.07% is the gross profit margin for NATIONSTAR MORTGAGE HOLDINGS which we consider to be strong. It has increased significantly from the same period last year.

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