Mortgage lender Mr. Cooper Group hit a series of all-time highs from July to October this year. Can it top itself again and soar to another high in November?
Mr. Cooper on Tuesday topped a key performance benchmark, as its Relative Strength (RS) Rating moved into the 80-plus percentile with an improvement to 83, a rise from 79 the day before.
The upgraded 83 RS Rating shows that Mr. Cooper topped 83% of all other stocks for price performance this past year. It's notable because market history reveals that the top-performing stocks tend to have an RS Rating above 80 in the early stages of their moves.
Mr. Cooper Has $1.2 Trillion Loan Portfolio
Although its predecessor companies have a collective 30-plus years experience, Mr. Cooper Group is among the newest mortgage lenders. It was formed in 2012 when Nationstar Mortgage went public. It listed on the Nasdaq stock exchange in 2018 as Mr. Cooper Group, a more user-friendly name.
The company says on its website it's the "Largest Servicer in the U.S." with 5.4 million customers and $1.2 trillion in its servicing portfolio.
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Although Mr. Cooper has an outstanding Relative Strength Rating, its other ratings need improving. It has a 60 EPS Rating in part because although its overall earnings growth is strong, it's sometimes erratic. Over the past year it posted quarterly EPS growth of more than 1,000%, 425% and 50% before seeing a 70% year-over-year drop on a difficult comp vs. a year earlier. Its revenue growth followed a similar pattern.
For the current quarter, analysts polled by FactSet forecast Mr. Cooper will report a 78% leap in EPS to $2.69 on a 44% gain in revenue to $583.2 million.
The Coppell, Texas-based mortgage lender also has a 74 Composite Rating and a strong B SMR Rating (sale + profit margins + return on equity) on an A-to-E scale with A best and E worst. It has a weak D Accumulation/Distribution Rating, showing big funds are selling more shares than buying. However, the number of funds holding COOP shares rose from 501 in December to 514 in March, then to 537 in September, a bullish indicator.
Shares Plunged, Then Soared
Mr. Cooper stock plunged to a 4.31 per share low in late March 2020 during the Covid market crash. It's risen steadily since then and hit an all-time high at 95.74 on July 25, a more than 22-fold increase since March 2020. It hit another high at 96 on Sept. 18 and again at 97.35 on Oct. 17.
Mr. Cooper earns the No. 8 rank among its peers in the 23-stock Finance-Consumer Loans industry group. Enova International, SoFi Technologies and Ezcorp are among the top 5 highly rated stocks in the group.
IBD's proprietary Relative Strength Rating tracks technical performance by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the last 52 weeks matches up against the rest of the market
Please follow James DeTar on X, formerly known as Twitter, @JimDeTar
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