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

OFG Bancorp

(

OFG

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified OFG Bancorp as such a stock due to the following factors:

  • OFG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.8 million
  • OFG has traded 115,460 shares today
  • OFG is trading at 4.71 times the normal volume for the stock at this time of day
  • OFG is trading at a new low 6.0427043813969998353741175378672778606414794921875 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 OFG:

OFG Bancorp, a financial holding company, provides various banking and financial services primarily in Puerto Rico. It operates in three segments: Banking, Wealth Management, and Treasury. The stock currently has a dividend yield of 2.9%. OFG has a PE ratio of 15. Currently there is one analyst that rates OFG Bancorp a buy, no analysts rate it a sell, and two rate it a hold.

The average volume for OFG Bancorp has been 504,100 shares per day over the past 30 days. OFG has a market cap of $619.1 million and is part of the financial sector and banking industry. The stock has a beta of 1.19 and a short float of 15.8% with 9.49 days to cover. Shares are down 15.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates OFG Bancorp as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • OFG, with its decline in revenue, underperformed when compared the industry average of 0.0%. Since the same quarter one year prior, revenues fell by 11.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 47.70% is the gross profit margin for OFG BANCORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, OFG's net profit margin of -2.62% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $34.17 million or 15.94% when compared to the same quarter last year. Despite a decrease in cash flow OFG BANCORP is still fairing well by exceeding its industry average cash flow growth rate of -37.23%.
  • OFG BANCORP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, OFG BANCORP reported lower earnings of $1.50 versus $1.74 in the prior year. For the next year, the market is expecting a contraction of 32.7% in earnings ($1.01 versus $1.50).
  • 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 Commercial Banks industry. The net income has significantly decreased by 112.6% when compared to the same quarter one year ago, falling from $23.75 million to -$2.99 million.

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