Today's Roof Leaker Stock Is Post Properties (PPS)

Trade-Ideas LLC identified Post Properties (PPS) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Post Properties

(

PPS

) 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 Post Properties as such a stock due to the following factors:

  • PPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $62.2 million.
  • PPS has traded 111,190 shares today.
  • PPS is trading at 2.55 times the normal volume for the stock at this time of day.
  • PPS 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 PPS:

Post Properties, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It primarily develops, owns, and manages multi-family apartment communities. Post Properties, Inc. was founded in 1971 and is based in Atlanta, Georgia. The stock currently has a dividend yield of 3%. PPS has a PE ratio of 42. Currently there are 2 analysts that rate Post Properties a buy, no analysts rate it a sell, and 12 rate it a hold.

The average volume for Post Properties has been 498,500 shares per day over the past 30 days. Post has a market cap of $3.2 billion and is part of the financial sector and real estate industry. The stock has a beta of -0.06 and a short float of 2% with 0.78 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Post Properties as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • POST PROPERTIES INC 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, POST PROPERTIES INC increased its bottom line by earning $3.88 versus $1.40 in the prior year. For the next year, the market is expecting a contraction of 64.0% in earnings ($1.40 versus $3.88).
  • 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 84.9% when compared to the same quarter one year ago, falling from $133.71 million to $20.15 million.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, POST PROPERTIES INC's return on equity is below that of both the industry average and the S&P 500.

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