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 Western Asset Mortgage Capital ( WMC) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Western Asset Mortgage Capital as such a stock due to the following factors:
- WMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.2 million.
- WMC traded 94,421 shares today in the pre-market hours as of 7:48 AM, representing 15% of its average daily volume.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in WMC with the Ticky from Trade-Ideas. See the FREE profile for WMC NOW at Trade-Ideas More details on WMC: Western Asset Mortgage Capital Corporation operates as a real estate investment trust (REIT) in the United States. It primarily engages in investing in, financing, and managing agency residential mortgage-backed securities. The stock currently has a dividend yield of 30.3%. Currently there are no analysts that rate Western Asset Mortgage Capital a buy, no analysts rate it a sell, and 5 rate it a hold. The average volume for Western Asset Mortgage Capital has been 505,600 shares per day over the past 30 days. Western Asset has a market cap of $419.2 million and is part of the financial sector and real estate industry. The stock has a beta of 0.67 and a short float of 20.9% with 7.84 days to cover. Shares are up 4.7% year-to-date as of the close of trading on Wednesday. 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 Western Asset Mortgage Capital as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, 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 against the S&P 500 and did not exceed that of the Real Estate Investment Trusts (REITs) industry. The net income has decreased by 16.4% when compared to the same quarter one year ago, dropping from $24.82 million to $20.76 million.
- Looking at the price performance of WMC's shares over the past 12 months, there is not much good news to report: the stock is down 33.41%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
- WESTERN ASSET MTG CAPITAL CP's earnings per share declined by 20.2% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, WESTERN ASSET MTG CAPITAL CP swung to a loss, reporting -$1.18 versus $3.76 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus -$1.18).
- WMC, with its very weak revenue results, has greatly underperformed against the industry average of 6.9%. Since the same quarter one year prior, revenues plummeted by 129.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WESTERN ASSET MTG CAPITAL CP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Western Asset Mortgage Capital Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.