AerCap Holdings (AER) Shows Signs Of Being Water-Logged And Getting Wetter
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified AerCap Holdings as such a stock due to the following factors:
- AER has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.3 million.
- AER has traded 1.2 million shares today.
- AER traded in a range 207.4% of the normal price range with a price range of $2.59.
- AER traded below its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on AER:
AerCap Holdings N.V., an independent aircraft leasing company, engages in the leasing, financing, sale, and management of commercial aircraft and engines. AER has a PE ratio of 7. Currently there are 8 analysts that rate AerCap Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for AerCap Holdings has been 2.6 million shares per day over the past 30 days. AerCap has a market cap of $8.4 billion and is part of the services sector and transportation industry. The stock has a beta of 1.80 and a short float of 6.8% with 4.09 days to cover. Shares are up 6.2% year-to-date as of the close of trading on Monday.
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Analysis:
rates AerCap Holdings as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- AER's very impressive revenue growth greatly exceeded the industry average of 0.1%. Since the same quarter one year prior, revenues leaped by 58.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AERCAP HOLDINGS NV reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AERCAP HOLDINGS NV increased its bottom line by earning $4.09 versus $2.56 in the prior year. This year, the market expects an improvement in earnings ($6.08 versus $4.09).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Trading Companies & Distributors industry and the overall market on the basis of return on equity, AERCAP HOLDINGS NV has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- AER has underperformed the S&P 500 Index, declining 8.13% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The debt-to-equity ratio is very high at 3.96 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- You can view the full AerCap Holdings Ratings Report.
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