Trade-Ideas: Ocwen Financial Corporation (OCN) Is Today's New Lifetime High Stock

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 or Stephanie Link.

Trade-Ideas LLC identified Ocwen Financial Corporation ( OCN) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocwen Financial Corporation as such a stock due to the following factors:

  • OCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.2 million.
  • OCN has traded 1.9 million shares today.
  • OCN is trading at a new lifetime high.

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More details on OCN:

Ocwen Financial Corporation, through its subsidiaries, engages in the servicing and origination of mortgage loans in the United States and internationally. OCN has a PE ratio of 31.5. Currently there are 7 analysts that rate Ocwen Financial Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Ocwen Financial Corporation has been 1.9 million shares per day over the past 30 days. Ocwen Financial has a market cap of $7.2 billion and is part of the financial sector and banking industry. The stock has a beta of 0.39 and a short float of 3% with 2.47 days to cover. Shares are up 53.6% year to date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ocwen Financial Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • OCN's very impressive revenue growth greatly exceeded the industry average of 106.3%. Since the same quarter one year prior, revenues leaped by 160.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OCWEN FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, OCWEN FINANCIAL CORP increased its bottom line by earning $1.30 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($3.27 versus $1.30).
  • The gross profit margin for OCWEN FINANCIAL CORP is currently very high, coming in at 82.13%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.72% trails the industry average.
  • Powered by its strong earnings growth of 65.62% and other important driving factors, this stock has surged by 95.54% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, OCWEN FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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