UWMC Slides as Market Sentiment Worsens

Tumbling to a price of $3.14 during today's aftermarket trading session, shares of UWM Holdings are now -15.14% below their average target price of $3.7. Before you assume this implies upside potential, be aware that the stock has a high number of shorts and relatively low rates of institutional ownership. Analysts are giving UWMC an average rating of hold and target prices ranging from $3 to $5 dollars per share.

The market sentiment on UWM Holdings seems pessimistic because the proportion of shorted shares in its float is quite high at 20.7%. Each short position represents an investor's expectation and hope that the stock's price will reverse course and start declining.

When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.

We can also make inferences about the market sentiment surrounding UWM Holdings by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.

At 38.1%, the rate of institutional ownership is below average, and does not indicate that a large number of institutions have concluded that it is a stable investment.

At a glance, here are some other statistics you may want to know about UWMC:

  • It has a trailing 12 month price to earnings (Eps) of $0.56 per share

  • UWM Holdings has a trailing 12 month Price to Earnings (P/E) ratio of 5.6 while the S&P 500 average is 15.97

  • The company has a Price to Book (P/B) ratio of 2.1 in contrast to the S&P 500's average ratio of 2.95

  • UWM Holdings is a Financial Services company, and the sector average P/E and P/B ratios are 13.34 and 1.95 respectively

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The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.