Extended Stay America (STAY) Weak On High Volume
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Extended Stay America as such a stock due to the following factors:
- STAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.5 million.
- STAY has traded 50,202 shares today.
- STAY is trading at 3.64 times the normal volume for the stock at this time of day.
- STAY is trading at a new low 3.00% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on STAY:
Extended Stay America, Inc. develops, owns, and operates hotels in the United States and Canada. The stock currently has a dividend yield of 3.1%. STAY has a PE ratio of 47. Currently there are 5 analysts that rate Extended Stay America a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for Extended Stay America has been 495,500 shares per day over the past 30 days. Extended Stay America has a market cap of $3.9 billion and is part of the services sector and leisure industry. Shares are down 6.8% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Extended Stay America as a
. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, generally high debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, STAY has underperformed the S&P 500 Index, declining 14.99% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Hotels, Restaurants & Leisure industry average, but is greater than that of the S&P 500. The net income has decreased by 14.2% when compared to the same quarter one year ago, dropping from $43.88 million to $37.66 million.
- The debt-to-equity ratio is very high at 3.13 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, EXTENDED STAY AMERICA INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- EXTENDED STAY AMERICA INC's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXTENDED STAY AMERICA INC turned its bottom line around by earning $0.18 versus -$0.06 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus $0.18).
- You can view the full Extended Stay America Ratings Report.
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