Cowen Group (COWN): Today's Weak 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.

Trade-Ideas LLC identified Cowen Group ( COWN) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Cowen Group as such a stock due to the following factors:

  • COWN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.5 million.
  • COWN has traded 581,436 shares today.
  • COWN is trading at 17.77 times the normal volume for the stock at this time of day.
  • COWN is trading at a new low 3.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 COWN:

Cowen Group, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides alternative investment management, investment banking, research, and sales and trading services for its clients. COWN has a PE ratio of 4. Currently there are 2 analysts that rate Cowen Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cowen Group has been 950,500 shares per day over the past 30 days. Cowen Group has a market cap of $657.3 million and is part of the financial sector and financial services industry. The stock has a beta of 1.69 and a short float of 8.1% with 6.73 days to cover. Shares are up 22.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cowen Group as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 21.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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, COWEN GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 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 69.7% when compared to the same quarter one year prior, rising from $9.84 million to $16.70 million.
  • COWEN 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, COWEN GROUP INC increased its bottom line by earning $1.41 versus $0.04 in the prior year. For the next year, the market is expecting a contraction of 62.4% in earnings ($0.53 versus $1.41).

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