Strong On High Volume: Nationstar Mortgage Holdings (NSM)

Trade-Ideas LLC identified Nationstar Mortgage Holdings ( NSM) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Nationstar Mortgage Holdings as such a stock due to the following factors:

  • NSM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.5 million.
  • NSM has traded 104,900 shares today.
  • NSM is trading at 8.83 times the normal volume for the stock at this time of day.
  • NSM is trading at a new high 14.08% 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.

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

More details on NSM:

Nationstar Mortgage Holdings Inc. provides servicing, origination, and transaction based services primarily to single-family residences in the United States. It operates in three segments: Servicing, Originations, and Xome. Currently there is 1 analyst that rates Nationstar Mortgage Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Nationstar Mortgage Holdings has been 622,400 shares per day over the past 30 days. Nationstar has a market cap of $1.3 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.10 and a short float of 32.9% with 22.75 days to cover. Shares are down 5.5% year-to-date as of the close of trading on Friday.

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 Nationstar Mortgage Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • NATIONSTAR MORTGAGE HOLDINGS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NATIONSTAR MORTGAGE HOLDINGS reported lower earnings of $0.27 versus $2.44 in the prior year. For the next year, the market is expecting a contraction of 194.4% in earnings (-$0.26 versus $0.27).
  • 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 Thrifts & Mortgage Finance industry. The net income has significantly decreased by 174.0% when compared to the same quarter one year ago, falling from -$48.32 million to -$132.39 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, NATIONSTAR MORTGAGE HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.51%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 141.50% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 14.9%. Since the same quarter one year prior, revenues fell by 13.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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

Here's Why Alphabet, Facebook and Amazon Earnings May Overshadow Tariff Worries

Here's Why Alphabet, Facebook and Amazon Earnings May Overshadow Tariff Worries

NYSE Trader Expects Blowout Earnings From Alphabet, Amazon and Facebook

NYSE Trader Expects Blowout Earnings From Alphabet, Amazon and Facebook

Don't Panic! The Risk of a Recession This Year Is Low

Don't Panic! The Risk of a Recession This Year Is Low

Even Standing Desk Company Varidesk Is Watching How the Trump Tariffs Play Out

Even Standing Desk Company Varidesk Is Watching How the Trump Tariffs Play Out

State Street Gets Pummeled on Software Deal; Pizza Wars Are Raging -- ICYMI

State Street Gets Pummeled on Software Deal; Pizza Wars Are Raging -- ICYMI