Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 5 Sep, 24 | FOA | Speculative Buy | USD 9.35 | USD 11.6 | USD 12.5 | 1 day | 33.7% |
Data Powered by EOD Historical Data (“EODHD”).
Finance of America Companies Inc. operates a consumer lending platform in the United States. The company operates through five segments: Mortgage Originations, Reverse Originations, Commercial Originations, Lender Services, and Portfolio Management segments. It provides residential mortgage loans to the government sponsored entities; government-insured agricultural lending solutions to farmers; product development, loan securitization, loan sales, risk management, asset management, and servicing oversight services to enterprise and third-party funds; and ancillary business services, title agency and title insurance services, mortgage servicing rights valuation and trade brokerage, transactional fulfillment services, mortgage loan third party review or due diligence services, and appraisal management services to residential mortgage, student lending, and commercial lending industry customers. The company was founded in 2013 and is headquartered in Plano, Texas.
Higher Gross Margins: 96.8% in Q1 FY24 vs Industry Median of 57.5%
Increased Operating Margin: 73.9% in Q1 FY24 vs Industry Median of 20.5%
Lower Liquidity: Current Ratio of 0.12x in Q1 FY24 vs Industry Median of 1.37x
Balance Sheet Risk: Debt-Equity of 119.23x in Q1 FY24 vs Industry Median of 0.86x
Dependence on Mortgage and Real Estate Markets, Interest Rate Sensitivity, Credit Quality of Loan Portfolio, Market Competition, Macroecoeconomic Events, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 9.35 | 8.0 | 11.6 | 12.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Finance of America Companies Inc. (NYSE: FOA) has recently broken out of a horizontal trendline resistance zone, establishing a higher high pattern that suggests a potential near-term uptrend. As the stock rises, it may encounter a significant resistance level at USD 11.60 within 2-4 weeks. A successful breach of this level could trigger additional buying momentum, leading to further gains.
On the daily chart, the 14-period Relative Strength Index (RSI) is positioned above the midpoint at 81.54, reinforcing a positive bias. Trading volumes also indicate strong support for this upward movement. Moreover, the stock is trading above its 21-day and 50-day Simple Moving Averages (SMAs), which may support any short-term price fluctuations.
Based on the current price action and technical indicators, FOA appears to be well-positioned on the chart. FOA's ‘Speculative Buy’ recommendation has been issued for the stock at USD 9.35 as of September 5, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Credit Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | ||
|---|---|---|---|---|---|---|---|---|
| FOA Finance of America Companies Inc |
0.10 0.37% | 25.52 | - | 9.09 | 0.18 | 0.59 | ||
| V Visa Inc. Class A |
6.12 1.98% | 315.90 | 31.25 | 25.97 | 16.18 | 13.64 | 16.19 | 23.37 |
| MA Mastercard Inc |
6.79 1.31% | 526.75 | 37.04 | 29.50 | 16.14 | 62.35 | 16.47 | 27.24 |
| AXP American Express Company |
5.95 2.07% | 293.73 | 21.83 | 20.04 | 3.53 | 7.21 | 4.18 | |
| PYPL PayPal Holdings Inc |
1.51 1.77% | 86.96 | 15.53 | 12.61 | 2.28 | 3.23 | 2.14 | 9.31 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from a high-risk perspective and recommendations are provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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