Fifth Third Bancorp (FITB) Is Today's Water-Logged And Getting Wetter 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 Fifth Third Bancorp ( FITB) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fifth Third Bancorp as such a stock due to the following factors:

  • FITB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $156.3 million.
  • FITB has traded 6.3 million shares today.
  • FITB traded in a range 285.5% of the normal price range with a price range of $1.10.
  • FITB traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on FITB:

Fifth Third Bancorp operates as a diversified financial services company in the United States. The company operates through four segments: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. The stock currently has a dividend yield of 2.4%. FITB has a PE ratio of 9.9. Currently there are 9 analysts that rate Fifth Third Bancorp a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Fifth Third Bancorp has been 7.8 million shares per day over the past 30 days. Fifth Third has a market cap of $17.6 billion and is part of the financial sector and banking industry. The stock has a beta of 1.47 and a short float of 0.9% with 1.03 days to cover. Shares are up 31.6% year to date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fifth Third Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, good cash flow from operations, expanding profit margins and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 45.05% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FITB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • FIFTH THIRD BANCORP has improved earnings per share by 23.7% 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, FIFTH THIRD BANCORP increased its bottom line by earning $1.66 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.66).
  • Net operating cash flow has significantly increased by 86.42% to $1,236.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 74.32%.
  • The gross profit margin for FIFTH THIRD BANCORP is currently very high, coming in at 90.85%. 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 25.79% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, FIFTH THIRD BANCORP 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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