By David AferiatFollow11/17/14 - 10:36 AM EST
Stocks in this article: OCN
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 or Stephanie Link.
Trade-Ideas LLC identified Ocwen Financial ( OCN) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocwen Financial as such a stock due to the following factors:
- OCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.4 million.
- OCN has traded 530,614 shares today.
- OCN is up 3.3% today.
- OCN was down 8.9% yesterday.
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More details on OCN:
Ocwen Financial Corporation, through its subsidiaries, is engaged in the servicing and origination of mortgage loans in the United States and internationally. OCN has a PE ratio of 17.1. Currently there is 1 analyst that rates Ocwen Financial a buy, no analysts rate it a sell, and 6 rate it a hold.
The average volume for Ocwen Financial has been 3.0 million shares per day over the past 30 days. Ocwen Financial has a market cap of $2.8 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.57 and a short float of 14.6% with 5.30 days to cover. Shares are down 62.9% year-to-date as of the close of trading on Friday.
TheStreetRatings.com Analysis:
TheStreet Quant Ratings rates Ocwen Financial as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 143.32% to $348.99 million when compared to the same quarter last year. In addition, OCWEN FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -51.98%.
- Despite the weak revenue results, OCN has outperformed against the industry average of 25.1%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for OCWEN FINANCIAL CORP is currently very high, coming in at 74.21%. Regardless of OCN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OCN's net profit margin of -14.61% significantly underperformed when compared to the industry average.
- 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 224.4% when compared to the same quarter one year ago, falling from $60.57 million to -$75.38 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 55.89%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 248.71% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, OCN is still more expensive than most of the other companies in its industry.
- You can view the full Ocwen Financial Ratings Report.
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