Today's Dead Cat Bounce Stock: WisdomTree Investments (WETF)

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 WisdomTree Investments ( WETF) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified WisdomTree Investments as such a stock due to the following factors:

  • WETF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.7 million.
  • WETF has traded 70,226 shares today.
  • WETF is up 8.7% today.
  • WETF was down 6.2% yesterday.

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More details on WETF:

WisdomTree Investments, Inc., through its subsidiaries, operates as an exchange-traded funds (ETFs) sponsor and asset manager. It offers ETFs in equities, currency, fixed income, and alternatives asset classes. WETF has a PE ratio of 20.5. Currently there are 7 analysts that rate WisdomTree Investments a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for WisdomTree Investments has been 3.4 million shares per day over the past 30 days. WisdomTree Investments has a market cap of $1.4 billion and is part of the financial sector and financial services industry. The stock has a beta of 2.15 and a short float of 16.9% with 7.14 days to cover. Shares are down 38.2% 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 WisdomTree Investments as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 46.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, WISDOMTREE INVESTMENTS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 41.87% is the gross profit margin for WISDOMTREE INVESTMENTS INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 70.37% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 284.6% when compared to the same quarter one year prior, rising from $7.85 million to $30.20 million.
  • WISDOMTREE INVESTMENTS INC reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WISDOMTREE INVESTMENTS INC increased its bottom line by earning $0.38 versus $0.08 in the prior year. For the next year, the market is expecting a contraction of 6.6% in earnings ($0.36 versus $0.38).

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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