Ocwen Financial Corporation (OCN): Stock With Unusual Social Activity

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 an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocwen Financial Corporation as such a stock due to the following factors:

  • OCN has 11x the normal benchmarked social activity for this time of the day compared to its average of 6.60 mentions/day.
  • OCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $181.3 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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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 21.2. Currently there are 6 analysts that rate Ocwen Financial Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Ocwen Financial Corporation has been 2.4 million shares per day over the past 30 days. Ocwen Financial has a market cap of $5.0 billion and is part of the financial sector and banking industry. The stock has a beta of 0.61 and a short float of 3.8% with 0.84 days to cover. Shares are down 33.5% year-to-date as of the close of trading on Wednesday.

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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, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • OCN's very impressive revenue growth exceeded the industry average of 101.2%. Since the same quarter one year prior, revenues leaped by 129.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • OCWEN FINANCIAL CORP has improved earnings per share by 18.9% 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 ($1.98 versus $1.30).
  • The gross profit margin for OCWEN FINANCIAL CORP is currently very high, coming in at 79.29%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, OCN's net profit margin of 12.61% significantly trails the industry average.
  • 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 30.4% when compared to the same quarter one year prior, rising from $51.40 million to $67.00 million.

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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