Trade-Ideas LLC identified

Diamond Resorts International

(

DRII

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Diamond Resorts International as such a stock due to the following factors:

  • DRII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.7 million.
  • DRII has traded 58,438 shares today.
  • DRII is down 3.3% today.
  • DRII was up 5.2% yesterday.

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More details on DRII:

Diamond Resorts International, Inc. operates in the hospitality and vacation ownership industry in the continental United States, Hawaii, Canada, Mexico, the Caribbean, Central America, South America, Europe, Asia, Australia, New Zealand, and Africa. DRII has a PE ratio of 12. Currently there are 3 analysts that rate Diamond Resorts International a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for Diamond Resorts International has been 1.4 million shares per day over the past 30 days. Diamond Resorts International has a market cap of $1.7 billion and is part of the services sector and leisure industry. The stock has a beta of 1.01 and a short float of 48.7% with 9.18 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Diamond Resorts International as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • DRII's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 16.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DIAMOND RESORTS INTL 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, DIAMOND RESORTS INTL increased its bottom line by earning $1.98 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($2.15 versus $1.98).
  • Net operating cash flow has decreased to $34.63 million or 16.76% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio is very high at 4.49 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

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