Diamond Resorts International (DRII) In A Perilous Reversal
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Diamond Resorts International as such a stock due to the following factors:
- DRII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.5 million.
- DRII has traded 121,527 shares today.
- DRII is down 3.1% today.
- DRII was up 5.5% yesterday.
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More details on DRII:
Diamond Resorts International, Inc. operates in the hospitality and vacation ownership industry in the United States, Hawaii, Canada, Mexico, the Caribbean, Central America, South America, Europe, Asia, Australia, New Zealand, and Africa. DRII has a PE ratio of 17. Currently there are 3 analysts that rate Diamond Resorts International a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Diamond Resorts International has been 661,800 shares per day over the past 30 days. Diamond Resorts International has a market cap of $1.9 billion and is part of the services sector and leisure industry. The stock has a beta of 1.01 and a short float of 47.5% with 25.78 days to cover. Shares are down 0.4% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Diamond Resorts International as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 11.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DIAMOND RESORTS INTL has improved earnings per share by 44.1% 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, DIAMOND RESORTS INTL turned its bottom line around by earning $0.76 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $0.76).
- The gross profit margin for DIAMOND RESORTS INTL is currently very high, coming in at 81.51%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.89% trails the industry average.
- After a year of stock price fluctuations, the net result is that DRII's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The debt-to-equity ratio is very high at 3.35 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 Diamond Resorts International Ratings Report.
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