Weyerhaeuser (WY) Is Today's Storm The Castle Stock
Trade-Ideas LLC identified
(
) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Weyerhaeuser as such a stock due to the following factors:
- WY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $225.8 million.
- WY has traded 3.2 million shares today.
- WY is trading at 2.50 times the normal volume for the stock at this time of day.
- WY crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 WY:
Weyerhaeuser Co. is a real estate investment trust. It primarily invests in United States. The firm operates under four business segments, timberlands, wood products, cellulose fibers and real estate. It owns timberlands primarily in the U.S and has long-term licenses in Canada. The stock currently has a dividend yield of 4.1%. WY has a PE ratio of 28. Currently there are 7 analysts that rate Weyerhaeuser a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Weyerhaeuser has been 4.4 million shares per day over the past 30 days. Weyerhaeuser has a market cap of $15.4 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.10 and a short float of 2% with 1.45 days to cover. Shares are down 14.3% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Weyerhaeuser as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- WEYERHAEUSER CO reported flat earnings per share in the most recent quarter. 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, WEYERHAEUSER CO increased its bottom line by earning $1.38 versus $0.83 in the prior year. For the next year, the market is expecting a contraction of 25.4% in earnings ($1.03 versus $1.38).
- WY, with its decline in revenue, underperformed when compared the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, WEYERHAEUSER CO's return on equity is below that of both the industry average and the S&P 500.
- WY has underperformed the S&P 500 Index, declining 13.64% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full Weyerhaeuser Ratings Report.
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