Radian Group (RDN) Is Today's Strong On High Volume 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 Radian Group ( RDN) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Radian Group as such a stock due to the following factors:

  • RDN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.0 million.
  • RDN has traded 417,657 shares today.
  • RDN is trading at 4.07 times the normal volume for the stock at this time of day.
  • RDN is trading at a new high 3.03% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on RDN:

Radian Group Inc., through its subsidiaries, operates as a credit enhancement company in the United States. The company operates in two segments, Mortgage Insurance and Financial Guaranty. The stock currently has a dividend yield of 0.1%. RDN has a PE ratio of 7.6. Currently there are 3 analysts that rate Radian Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Radian Group has been 3.6 million shares per day over the past 30 days. Radian Group has a market cap of $2.8 billion and is part of the financial sector and insurance industry. The stock has a beta of 2.84 and a short float of 21.6% with 14.98 days to cover. Shares are up 2.9% year-to-date as of the close of trading on Tuesday.

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 Radian Group 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, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • RDN's very impressive revenue growth greatly exceeded the industry average of 12.7%. Since the same quarter one year prior, revenues leaped by 71.8%. 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 Thrifts & Mortgage Finance industry and the overall market, RADIAN GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for RADIAN GROUP INC is rather high; currently it is at 64.33%. It has increased significantly from the same period last year. Along with this, the net profit margin of 50.75% significantly outperformed against the industry average.
  • RADIAN GROUP 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 year. We feel that this trend should continue. During the past fiscal year, RADIAN GROUP INC continued to lose money by earning -$1.37 versus -$3.41 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus -$1.37).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 627.0% when compared to the same quarter one year prior, rising from -$33.17 million to $174.83 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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