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Trade-Ideas LLC identified

Altisource Residential Corporation

(

RESI

) as a weak on high relative volume 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 $4.9 million.
  • RESI has traded 50,743 shares today.
  • RESI is trading at 2.54 times the normal volume for the stock at this time of day.
  • RESI is trading at a new low 3.18% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 RESI:

TheStreet Recommends

Altisource Residential Corporation, through its 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 17.2%. RESI has a PE ratio of 12. Currently there are 2 analysts that rate Altisource Residential Corporation a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Altisource Residential Corporation has been 436,700 shares per day over the past 30 days. Altisource has a market cap of $715.6 million and is part of the financial sector and real estate industry. The stock has a beta of 1.94 and a short float of 9.1% with 6.76 days to cover. Shares are down 34.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Altisource Residential Corporation as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to -$43.55 million or 1.83% when compared to the same quarter last year. Despite an increase in cash flow, ALTISOURCE RESIDENTIAL CORP's average is still marginally south of the industry average growth rate of 9.44%.
  • The revenue fell significantly faster than the industry average of 6.1%. Since the same quarter one year prior, revenues fell by 46.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 114.2% when compared to the same quarter one year ago, falling from $37.68 million to -$5.36 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ALTISOURCE RESIDENTIAL CORP's return on equity is below that of both the industry average and the S&P 500.

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