Which Way Are Investors Anticipating This Stock Will Go: PennyMac Financial Services, Inc. (NYSE:PFSI)

Based on the latest information, investors are looking at PennyMac Financial Services, Inc. (NYSE:PFSI)’s short data and trying to figure out market sentiment on which way the market thinks the stock is moving. The firm has 1.89% of total shares float short, yielding a short ratio of 2.69.

When investors engage in short selling or “shorting a stock”, they actually borrow shares from an existing owner, sell the borrowed shares at market price, and take the cash.  The short sellers then promise to replace the stock in the future and makes dividend payments out of their own pockets to cover the dividend income that is no longer exists on the original, now borrowed and sold, shares.

They hope that the stock price will fall or that the company will fail and go bankrupt, leading the equity holders to ruin.  The short sellers will then buy the stock back at a much lower price and replace the borrowed shares, pocketing the difference. 

Shorting a stock can be very risky if the price doesn’t decline like planned and, in fact, increases.  It’s important for any investor to understand the dangers and potentially catastrophic financial losses of short selling.

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FUNDAMENTAL DATA

Fundamental analysis examines the financial elements of a company, for example; sales, cash flow, profit and balance sheet.  These numbers are then crunched to create theoretical valuations of companies. 

Earnings Per Share (EPS) is the earnings made by a company divided by their number of shares.  EPS enables the earnings of a company to easily be compared to their competitors. The higher the number, the more profit per dollar is being made on investor capital.  PennyMac Financial Services, Inc. (NYSE:PFSI)’s EPS is {{m:9|n:3|id:50|s:EPS (ttm)}}.  Their EPS should be compared to other companies in the Financial sector.

Price-to-Earnings Ratio is the current share price divided by annual earnings per share.  P/E provides a number that details how many years of earnings it will take a stock to recoup the value of one share at current price levels.  Easy to calculate and understand, P/E is an extremely common ratio that is used to compare valuations of stocks against each other relatively.  PennyMac Financial Services, Inc.’s  P/E ratio is 19.62. 

Projected Earnings Growth (PEG) is a forward looking ratio based on anticipated earnings growth.  PEG is created by dividing P/E by the projected rate of earnings growth.  PennyMac Financial Services, Inc.’s  PEG is 2.08. 

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RECENT PERFORMANCE AND RECOMMENDATION

Let’s take a look at how the stock has been performing recently.  Over the past twelve months, PennyMac Financial Services, Inc. (NYSE:PFSI)’s stock was 15.23%.  Over the last week of the month, it was 6.31%, 8.26% over the last quarter, and  27.89% for the past six months. 

Over the past 50 days, PennyMac Financial Services, Inc. stock’s -2.37% off of the high and 12.52% removed from the low.  Their 52-Week High and Low are noted here.  -2.37% away from the high and 68.89% from the low. 

The consensus analysts recommendation at this point stands at 2.30 on PennyMac Financial Services, Inc. (NYSE:PFSI).  This is based on a 1-5 scale where 1 indicates a Strong Buy and 5 a Strong Sell. The same analysts are predicting that the company shares will trade to $19.50 within the next 12-18 months. 

Disclaimer: The views, opinions, and information expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company stakeholders, financial professionals, or analysts. Examples of analysis performed within this article are only examples. They should not be utilized to make stock portfolio or financial decisions as they are based only on limited and open source information. Assumptions made within the analysis are not reflective of the position of any analysts or financial professionals.

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