MBIA (MBI) Highlighted As Weak On High Volume

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

  • MBI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.1 million.
  • MBI has traded 2.6 million shares today.
  • MBI is trading at 11.62 times the normal volume for the stock at this time of day.
  • MBI is trading at a new low 10.05% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in MBI with the Ticky from Trade-Ideas. See the FREE profile for MBI NOW at Trade-Ideas

More details on MBI:

MBIA Inc. provides financial guarantee insurance services to public finance markets in the United States and internationally. The company operates through U.S. Public Finance Insurance, and International and Structured Finance Insurance segments. MBI has a PE ratio of 5.

The average volume for MBIA has been 2.9 million shares per day over the past 30 days. MBIA has a market cap of $1.5 billion and is part of the financial sector and insurance industry. The stock has a beta of 2.97 and a short float of 6.5% with 1.32 days to cover. Shares are down 33.2% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MBIA as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 97.87% to -$9.00 million when compared to the same quarter last year. In addition, MBIA INC has also vastly surpassed the industry average cash flow growth rate of 21.94%.
  • The gross profit margin for MBIA INC is currently very high, coming in at 79.00%. Regardless of MBI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MBI's net profit margin of 31.50% significantly outperformed against the industry.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, MBIA INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 73.0% when compared to the same quarter one year ago, falling from $256.00 million to $69.00 million.
  • The debt-to-equity ratio is very high at 2.26 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Video: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Video: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Dow Rises for First Time in 9 Days, Oil Jumps as OPEC Agrees to Boost Output

Dow Rises for First Time in 9 Days, Oil Jumps as OPEC Agrees to Boost Output

German Automakers Slump After Trump Tweets New Tariff Threat

German Automakers Slump After Trump Tweets New Tariff Threat

Chipotle Rises After Wedbush Lifts Price Target

Chipotle Rises After Wedbush Lifts Price Target

Crude Rises on OPEC Deal That Doesn't Specify Output Boost

Crude Rises on OPEC Deal That Doesn't Specify Output Boost