Trade-Ideas LLC identified

Diamond Resorts International

(

DRII

) as a weak on high relative volume 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 $35.9 million.
  • DRII has traded 629,096 shares today.
  • DRII is trading at 5.71 times the normal volume for the stock at this time of day.
  • DRII is trading at a new low 10.01% 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 DRII:

TheStreet Recommends

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 13. Currently there are 3 analysts that rate Diamond Resorts International a buy, no analysts rate it a sell, and none rate it a hold.

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 50.7% with 10.22 days to cover. Shares are up 0.7% year-to-date as of the close of trading on Friday.

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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 11.6%. 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 $2.00 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($2.15 versus $2.00).
  • 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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