Prologis (PLD) Showing Signs Of Being A Roof Leaker
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
(
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Prologis as such a stock due to the following factors:
- PLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $133.4 million.
- PLD has traded 448,037 shares today.
- PLD is trading at 2.31 times the normal volume for the stock at this time of day.
- PLD crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on PLD:
Prologis Inc. is an independent equity real estate investment trust. It invests in the real estate markets across the globe. The firm engages in the ownership, development, management, and leasing of industrial distribution and retail properties. The stock currently has a dividend yield of 3.4%. PLD has a PE ratio of 34.2. Currently there are 12 analysts that rate Prologis a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Prologis has been 3.1 million shares per day over the past 30 days. Prologis has a market cap of $21.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.87 and a short float of 2.9% with 3.98 days to cover. Shares are down 0.9% year-to-date as of the close of trading on Thursday.
Analysis:
rates Prologis as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and increase in stock price during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- PLD's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 6.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 570.5% when compared to the same quarter one year prior, rising from $61.19 million to $410.29 million.
- Net operating cash flow has significantly increased by 66.12% to $253.74 million when compared to the same quarter last year. In addition, PROLOGIS INC has also vastly surpassed the industry average cash flow growth rate of -43.90%.
- PROLOGIS INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PROLOGIS INC increased its bottom line by earning $1.18 versus $0.42 in the prior year. For the next year, the market is expecting a contraction of 47.9% in earnings ($0.62 versus $1.18).
- The gross profit margin for PROLOGIS INC is currently lower than what is desirable, coming in at 26.55%. Regardless of PLD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PLD's net profit margin of 80.16% significantly outperformed against the industry.
- You can view the full Prologis Ratings Report.
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