Gut Call On Ocwen Financial Corporation (OCN): Now It’s Really Up Too Much

Ocwen Financial Corporation (NYSE:OCN) is one of the hottest stocks trading today on the U.S. Markets as the company shares are 3.42% or 0.055 points higher from last closing price of $1.61, reaching $1.665 at last check. Any clue why there is so much of action in the OCN stock? The share price has risen in 4 of the last 5 days and is down -19.1% over the past week. It will be exciting to see whether the stock manages to continue increasing or take a minor break for the next few days. The move came on weak volume too with far less shares changing hands than in a normal session. Trading activity as of this writing weakened by -45,964 shares, and in total 242736 shares valued at $404155 were seen changing hands compared with 288700 shares valued at $464807 recorded at the previous session. You should take into consideration that a falling volume on higher prices causes divergence and may be an early warning about possible changes in OCN stock for the next couple of days.

Ocwen Financial Corporation (OCN) shares have notched a 3-month decline of about -19.1%, but has still advanced 20.15% year to date. By comparison, the stock sank -63.9% over the past 12 months, while it slipped -12.97% over the 1 month. The company’s market cap is around $220.59M, with its short interest ratio standing at 7.34%.

In the current trading session for OCN, the stock witnessed two major price actions, it rose to a high of $1.72 and was down as much as $1.6 at one point. The high recorded is very low when compared to their 52-week high which is $1.2. The 52-week high is now at -64.47 distance from current price. Their recent low of $4.7 represents a 39.17% recovery. This data is quite important for investors who look to benefit from the recent rise of the company’s stock. The price target currently for OCN is $3, this is below the recent high that the stock attained. Taking a look at the overall sentimental views of financial analysts, the trading pattern of this stock recently is very clear.

The stock of Ocwen Financial Corporation earned $-0.86 per share in the trailing 12 months and has a P/E ratio of -1.94. You can compare it with that of similar companies in its industry to get a sense of whether the stock you’re looking to purchase is overvalued or undervalued. Its current price to earnings ratio is lower than the ones recorded by the industry which is 18.78 and lower compared to the sector’s average of 19.01. When the P/E ratio is low let’s say below 1.0, then the stock price is considered a good value. OCN also has P/S multiple of 0.21. This is smaller versus the 12 month P/S ratios of other companies in the same indutry. The peer average price to sales ratio is 5.67x.

The company recorded an interesting insider purchase transaction by the Major Shareholder on Feb 07, 2019. A Securities and Exchanges Commission filings show that Leon G Cooperman bought a total of 275,007 OCN shares that day for a sum of around $459,262. The filings show that the insider stake has now grown to 1,000,000 shares, currently worth $1,665,000. Ocwen Financial Corporation (OCN) insiders have acquired 500,000 shares in the stock within the past three months. The total insider sales reported to the SEC in that time frame amounted to 44,710 shares. In total, individual insiders traded 544,710 shares in the business, which makes up 20.944% of 2,600,761 shares that were traded over a year. In the past 12 months, insiders have purchased 798,563 shares while the seller parted with 1,802,198 shares.

OCN‘s last price was down -29.9% as compared to the average trading price of 50 days recorded at $2.38 while enlarging the period to 200 trading days, the average closing price was $1.77. At present, there are 137.01 million in the total number of common shares owned by the public and among those 112.57 million shares have been available to trade. The percentage of shares being held by the company management was 1.2% while institutions stake was 58.4%. The company has generated negative returns on equity over the last 12 months (-21.2%). It managed to keep its gross profit margin at 66.2% over the past 12 months.

When assessing the full upside of the OCN stock, there is another set of technicals that should be looked into and considered. Its 2.05% gain from moving average of $1.63 has brought about a positive sentiment when calculated over the last 20 days. The market has allocated a beta of 1.64 to the stock. With the beta been greater than one, this implies that the company shares are theoretically more volatile than the market, something that the traders definitely are keeping an eye on.

Most of the analysts surveyed by Thomson/First Call think quite highly of Ocwen Financial Corporation — 0 analysts rate the stock as a buy with another 0 rating it strong buy. There are 2 analysts who maintain a hold rating for the stock, with 0 giving it a sell rating. Analysts arrived at a 12-month price target of $4 on shares of Ocwen Financial Corporation (NYSE:OCN), which corresponds to 139.52% upside potential than its current market price of $1.665 and implies potential despite the recent advance in the price. However, their current target price has fallen from $4 a month ago and is down handily from the consensus target of $4 a quarter ago.

In the last five years, the EPS of the company has been roughly -17.5%. Though the percentage looks disappointing, extra tailwinds are emerging as looking out over a next 5-year period, with analysts estimating that their earnings will increase annually by 3%. The revenue of the company has retreated at an average annualized rate of about -12.2 over the last five years. The company recently recorded an increase of 16.7%, but this figure is rather attractive.

Let’s briefly check the hedge fund interest towards OCN stock. Marshall Wace LLP added position in the company after it grew 36% or 464,278 shares of its common stock. The hedge fund now owns 631,418 shares worth $1,051,311, SEC documents show. MetLife Investment Advisors LLC shored up assets in the stock as 39717.33 shares have been purchased, increasing its stake by 50% to 59,576 shares which are currently valued at $99,194. In addition, Metropolitan Life Insurance Co NY recently reported that it now owns 43,083 shares making a total of $71,733 based on the recent price. This refelects a change of 50% in their ownership.