New Residential Investment (NRZ) Trading With Heavy Volume Before Market Open

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 New Residential Investment ( NRZ) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified New Residential Investment as such a stock due to the following factors:

  • NRZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.4 million.
  • NRZ traded 515,786 shares today in the pre-market hours as of 8:48 AM, representing 27.1% of its average daily volume.

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More details on NRZ:

New Residential Investment Corp., a real estate investment trust (REIT), focuses on investing in and managing residential mortgage related assets. It operates through Servicing Related Assets, Residential Securities and Loans, and Other Investments segments. The stock currently has a dividend yield of 10.7%. NRZ has a PE ratio of 7. Currently there are 6 analysts that rate New Residential Investment a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for New Residential Investment has been 2.8 million shares per day over the past 30 days. New Residential Investment has a market cap of $3.3 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.12 and a short float of 3.5% with 2.61 days to cover. Shares are up 30.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates New Residential Investment as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income has significantly decreased by 26.2% when compared to the same quarter one year ago, falling from $48.77 million to $35.98 million.
  • Net operating cash flow has significantly decreased to -$18.59 million or 1000.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • NEW RESIDENTIAL INV CP's earnings per share declined by 34.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEW RESIDENTIAL INV CP increased its bottom line by earning $2.52 versus $1.96 in the prior year. For the next year, the market is expecting a contraction of 22.2% in earnings ($1.96 versus $2.52).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, NEW RESIDENTIAL INV CP's return on equity exceeds that of both the industry average and the S&P 500.
  • NRZ, with its decline in revenue, underperformed when compared the industry average of 8.5%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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