Prudential Financial (PRU) Highlighted As Momo Momentum 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 Prudential Financial ( PRU) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Prudential Financial as such a stock due to the following factors:

  • PRU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $197.0 million.
  • PRU has a PE ratio of 34.5.
  • PRU is currently in the upper 30% of its 1-year range.
  • PRU is in the upper 25% of its 20-day range.
  • PRU is in the upper 35% of its 5-day range.
  • PRU is currently trading above yesterday's high.
  • PRU has experienced a gap between today's open and yesterday's close of 1%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on PRU:

Prudential Financial, Inc. provides insurance, investment management, and other financial products and services to individual and institutional customers in the United States and internationally. The stock currently has a dividend yield of 2.4%. PRU has a PE ratio of 34.5. Currently there are 12 analysts that rate Prudential Financial a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Prudential Financial has been 2.5 million shares per day over the past 30 days. Prudential Financial has a market cap of $41.2 billion and is part of the financial sector and insurance industry. The stock has a beta of 1.82 and a short float of 1.3% with 3.19 days to cover. Shares are down 3.7% 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 Prudential Financial as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, increase in stock price during the past year and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 26.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 271.9% when compared to the same quarter one year prior, rising from -$720.00 million to $1,238.00 million.
  • Net operating cash flow has significantly increased by 958.28% to $1,979.00 million when compared to the same quarter last year. In addition, PRUDENTIAL FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of 4.28%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
  • PRUDENTIAL FINANCIAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PRUDENTIAL FINANCIAL INC swung to a loss, reporting -$1.61 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($9.50 versus -$1.61).

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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