Perilous Reversal Stock: Altisource Residential Corporation (RESI)
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 or Stephanie Link.
Trade-Ideas LLC identified
Altisource Residential Corporation
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Altisource Residential Corporation as such a stock due to the following factors:
- RESI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.6 million.
- RESI has traded 298,543 shares today.
- RESI is down 3.1% today.
- RESI was up 5.1% yesterday.
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More details on RESI:
Altisource Residential Corporation, through its wholly-owned subsidiary, Altisource Residential, L.P., focuses on acquiring, owning, and managing single-family rental properties in the United States. The stock currently has a dividend yield of 10.7%. RESI has a PE ratio of 6.3. Currently there are 3 analysts that rate Altisource Residential Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Altisource Residential Corporation has been 716,900 shares per day over the past 30 days. Altisource has a market cap of $1.2 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.97 and a short float of 10.2% with 4.64 days to cover. Shares are up 11.9% year-to-date as of the close of trading on Monday.
Analysis:
rates Altisource Residential Corporation as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- RESI's very impressive revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues leaped by 452.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, ALTISOURCE RESIDENTIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- 45.30% is the gross profit margin for ALTISOURCE RESIDENTIAL CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, RESI's net profit margin of 34.53% compares favorably to the industry average.
- RESI has underperformed the S&P 500 Index, declining 21.71% 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.
- Net operating cash flow has significantly decreased to -$44.37 million or 776.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full Altisource Residential Corporation Ratings Report.
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