Hatteras Financial (HTS) Weak On High Volume
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Hatteras Financial as such a stock due to the following factors:
- HTS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.7 million.
- HTS has traded 156,549 shares today.
- HTS is trading at 4.65 times the normal volume for the stock at this time of day.
- HTS 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 HTS:
Hatteras Financial Corp. operates as an externally-managed mortgage real estate investment trust (REIT) in the United States. The stock currently has a dividend yield of 10.6%. HTS has a PE ratio of 52.3. Currently there are 3 analysts that rate Hatteras Financial a buy, 1 analyst rates it a sell, and 5 rate it a hold.
The average volume for Hatteras Financial has been 748,400 shares per day over the past 30 days. Hatteras Financial has a market cap of $1.8 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.31 and a short float of 2.4% with 2.22 days to cover. Shares are up 1.1% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Hatteras Financial as a
. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income and weak operating cash flow.
Highlights from the ratings report include:
- The share price of HATTERAS FINANCIAL CORP has not done very well: it is down 5.11% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 159.3% when compared to the same quarter one year ago, falling from -$9.97 million to -$25.85 million.
- Net operating cash flow has decreased to $108.42 million or 25.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HATTERAS FINANCIAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- HATTERAS FINANCIAL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, HATTERAS FINANCIAL CORP turned its bottom line around by earning $0.36 versus -$1.60 in the prior year. This year, the market expects an improvement in earnings ($2.11 versus $0.36).
- You can view the full Hatteras Financial Ratings Report.
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