Trade-Ideas LLC identified

Chimera Investment

(

CIM

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

  • CIM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.0 million.
  • CIM has traded 387,479 shares today.
  • CIM is trading at 3.39 times the normal volume for the stock at this time of day.
  • CIM is trading at a new low 3.02% 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 CIM:

Chimera Investment Corporation operates as a real estate investment trust in the United States. The stock currently has a dividend yield of 11.5%. CIM has a PE ratio of 12. Currently there are no analysts that rate Chimera Investment a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Chimera Investment has been 1.7 million shares per day over the past 30 days. Chimera Investment has a market cap of $3.1 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.76 and a short float of 2.2% with 2.85 days to cover. Shares are up 23% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Chimera Investment as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • CIM's revenue growth has slightly outpaced the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 18.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • CHIMERA INVESTMENT CORP has improved earnings per share by 25.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHIMERA INVESTMENT CORP reported lower earnings of $1.29 versus $2.90 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $1.29).
  • 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, CHIMERA INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.

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