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Bear of the Day: Orchid Island Capital (ORC)

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Stocks with strong earnings trends tend to outperform the broad market in the long run. The reason is simple, if earnings go up, even if valuation remains the same, the stock price will rise. One way to find stocks with the strongest earnings trends is to lean on the power of the Zacks Rank. Stocks with weakening or negative earnings trends will be on the low end of the rank. Today’s Bear of the Day is one with a weaker earnings trend. That’s why they are a Zacks Rank #5 (Strong Sell).

Today’s Bear of the Day is Orchid Island Capital (ORC - Free Report) . Orchid Island is a specialty finance company that invests in residential mortgage-backed securities (RMBS). The Company's business objective is to provide attractive risk-adjusted total returns to its investors over the long term through a combination of capital appreciation and the payment of regular monthly distributions. The Company's portfolio consists of two categories of Agency RMBS: pass-through Agency RMBS and structured Agency RMBS.

The reason for the unfavorable Zacks Rank lies in the series of earnings estimate revisions coming in to the downside. Analysts have dropped their earnings estimates for both the current year and next year over the last ninety days. The bearish sentiment has cut down our Zacks Consensus Estimates for the current year from $1.04 to 95 cents while next year’s number has dropped from $1.07 to $1 even.

Despite the negative Zacks Rank on Orchid Island Capital, the stock is in a top industry. In fact, the Financial – Mortgage & Related Services Industry ranks in the Top 5% of our Zacks Industry Rank. Investors looking for other stocks within the same industry have several Zacks Rank #1 (Strong Buy) s tocks to investigate further. Among them are Ellington Financial (EFC - Free Report) as well as PennyMac Financial (PFSI - Free Report) .

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See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ellington Financial Inc. (EFC) - free report >>

Orchid Island Capital, Inc. (ORC) - free report >>

PennyMac Financial Services, Inc. (PFSI) - free report >>

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