New York Community Bancorp (NYCB) Showing Signs Of Being Water-Logged And Getting Wetter

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 New York Community Bancorp ( NYCB) 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 New York Community Bancorp as such a stock due to the following factors:

  • NYCB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.3 million.
  • NYCB has traded 323,246 shares today.
  • NYCB traded in a range 390.4% of the normal price range with a price range of $0.93.
  • NYCB traded below its daily resistance level (quality: 81 days, meaning that the stock is crossing a resistance level set by the last 81 calendar days. 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 NYCB:

New York Community Bancorp, Inc. operates as a multi-bank holding company for New York Community Bank and New York Commercial Bank that offer banking products and financial services in New York, New Jersey, Florida, Ohio, and Arizona. The stock currently has a dividend yield of 6%. NYCB has a PE ratio of 15.6. Currently there are 3 analysts that rate New York Community Bancorp a buy, 2 analysts rate it a sell, and 9 rate it a hold.

The average volume for New York Community Bancorp has been 2.0 million shares per day over the past 30 days. New York Community has a market cap of $7.4 billion and is part of the financial sector and banking industry. The stock has a beta of 1.15 and a short float of 9.2% with 19.42 days to cover. Shares are down 0.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates New York Community Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, NYCB's share price has jumped by 29.74%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NYCB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 371.40% to $669.88 million when compared to the same quarter last year. In addition, NEW YORK CMNTY BANCORP INC has also vastly surpassed the industry average cash flow growth rate of 32.37%.
  • The gross profit margin for NEW YORK CMNTY BANCORP INC is rather high; currently it is at 69.08%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NYCB's net profit margin of 23.87% significantly trails the industry average.
  • The revenue fell significantly faster than the industry average of 102.5%. Since the same quarter one year prior, revenues slightly dropped by 8.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • NEW YORK CMNTY BANCORP INC's earnings per share declined by 10.3% in the most recent quarter compared to 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, NEW YORK CMNTY BANCORP INC increased its bottom line by earning $1.14 versus $1.09 in the prior year. For the next year, the market is expecting a contraction of 6.1% in earnings ($1.07 versus $1.14).

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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