MB Financial (MBFI) 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 MB Financial ( MBFI) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified MB Financial as such a stock due to the following factors:

  • MBFI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.8 million.
  • MBFI has traded 56,042 shares today.
  • MBFI is trading at 5.61 times the normal volume for the stock at this time of day.
  • MBFI is trading at a new high 3.10% 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 MBFI:

MB Financial, Inc. operates as a bank holding company for MB Financial Bank, N.A. that provides financial services primarily to small and middle market businesses and individuals in the United States. It operates in two segments, Banking and Leasing. The stock currently has a dividend yield of 1.9%. MBFI has a PE ratio of 17.5. Currently there are 3 analysts that rate MB Financial a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for MB Financial has been 294,700 shares per day over the past 30 days. MB Financial has a market cap of $1.6 billion and is part of the financial sector and banking industry. The stock has a beta of 1.30 and a short float of 4.5% with 6.99 days to cover. Shares are down 10.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MB Financial as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The gross profit margin for MB FINANCIAL INC/MD is currently very high, coming in at 97.13%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.44% is above that of the industry average.
  • Net operating cash flow has increased to $69.24 million or 10.76% when compared to the same quarter last year. In addition, MB FINANCIAL INC/MD has also vastly surpassed the industry average cash flow growth rate of -97.33%.
  • Despite the weak revenue results, MBFI has outperformed against the industry average of 12.9%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.

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