Trade-Ideas LLC identified

OneMain Holdings

(

OMF

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

  • OMF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.7 million.
  • OMF has traded 156,711 shares today.
  • OMF is trading at 9.14 times the normal volume for the stock at this time of day.
  • OMF is trading at a new low 7.18% 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 OMF:

OneMain Holdings, Inc., through its subsidiaries, provides consumer finance and credit insurance products and services. It provides personal loans secured by consumer household goods, and other personal property; and unsecured loans. Currently there are 7 analysts that rate OneMain Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for OneMain Holdings has been 983,900 shares per day over the past 30 days. OneMain has a market cap of $3.2 billion and is part of the financial sector and financial services industry. Shares are down 40.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates OneMain Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • 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 Consumer Finance industry. The net income has significantly decreased by 102.6% when compared to the same quarter one year ago, falling from $426.75 million to -$11.00 million.
  • The debt-to-equity ratio is very high at 3.20 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Consumer Finance industry and the overall market, ONEMAIN HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.93%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 102.16% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • ONEMAIN HOLDINGS INC 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, ONEMAIN HOLDINGS INC turned its bottom line around by earning $4.37 versus -$0.18 in the prior year. For the next year, the market is expecting a contraction of 52.6% in earnings ($2.07 versus $4.37).

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