Rait Financial (RAS) Flagged As Strong On High Volume

Trade-Ideas LLC identified Rait Financial (RAS) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Rait Financial

(

RAS

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Rait Financial as such a stock due to the following factors:

  • RAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • RAS has traded 71,564 shares today.
  • RAS is trading at 3.16 times the normal volume for the stock at this time of day.
  • RAS is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 RAS:

RAIT Financial Trust operates as a self-managed and self-advised real estate investment trust (REIT). The company, through its subsidiaries, invests in, manages, and services real estate-related assets with a focus on commercial real estate. The stock currently has a dividend yield of 16.1%. Currently there are 2 analysts that rate Rait Financial a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Rait Financial has been 655,600 shares per day over the past 30 days. Rait Financial has a market cap of $406.9 million and is part of the financial sector and real estate industry. The stock has a beta of 1.40 and a short float of 5.5% with 5.38 days to cover. Shares are down 43.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Rait Financial as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, RAIT FINANCIAL TRUST's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RAIT FINANCIAL TRUST is currently lower than what is desirable, coming in at 31.77%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 2.14% significantly trails the industry average.
  • RAS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 37.32%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • RAS, with its decline in revenue, slightly underperformed the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • RAIT FINANCIAL TRUST reported significant earnings per share improvement 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, RAIT FINANCIAL TRUST continued to lose money by earning -$3.88 versus -$4.58 in the prior year. This year, the market expects an improvement in earnings (-$0.00 versus -$3.88).

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