Water-Logged And Getting Wetter Stock Of The Day: Investors Bancorp (ISBC)

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 Investors Bancorp ( ISBC) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Investors Bancorp as such a stock due to the following factors:

  • ISBC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.6 million.
  • ISBC has traded 999,209 shares today.
  • ISBC traded in a range 224.7% of the normal price range with a price range of $0.34.
  • ISBC traded below its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on ISBC:

Investors Bancorp, Inc. operates as the holding company for Investors Bank that provides various banking products and services for businesses and individuals in the United States. The stock currently has a dividend yield of 1.7%. ISBC has a PE ratio of 3. Currently there are 4 analysts that rate Investors Bancorp a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Investors Bancorp has been 2.6 million shares per day over the past 30 days. Investors has a market cap of $4.2 billion and is part of the financial sector and banking industry. Shares are up 7.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Investors Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, expanding profit margins, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • ISBC's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 21.9% when compared to the same quarter one year prior, going from $34.42 million to $41.95 million.
  • The gross profit margin for INVESTORS BANCORP INC is currently very high, coming in at 78.38%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 22.83% trails the industry average.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
  • INVESTORS BANCORP INC has improved earnings per share by 22.4% 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, INVESTORS BANCORP INC reported lower earnings of $0.37 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus $0.37).

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