Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
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 Digital Realty as such a stock due to the following factors:
- DLR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.4 million.
- DLR has traded 1.2 million shares today.
- DLR is trading at 1.64 times the normal volume for the stock at this time of day.
- DLR 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 DLR:
Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. The stock currently has a dividend yield of 6.4%. DLR has a PE ratio of 24.5. Currently there are 4 analysts that rate Digital Realty a buy, 1 analyst rates it a sell, and 9 rate it a hold.
The average volume for Digital Realty has been 1.5 million shares per day over the past 30 days. Digital has a market cap of $6.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.50 and a short float of 27.7% with 21.06 days to cover. Shares are up 6% year-to-date as of the close of trading on Wednesday.
rates Digital Realty as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- DLR's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the Real Estate Investment Trusts (REITs) industry average, but is less than that of the S&P 500. The net income increased by 0.3% when compared to the same quarter one year prior, going from $54.57 million to $54.70 million.
- 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, DIGITAL REALTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.
- DIGITAL REALTY TRUST INC's earnings per share declined by 8.3% in the most recent quarter compared to the same quarter a year ago. 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, DIGITAL REALTY TRUST INC increased its bottom line by earning $2.10 versus $1.47 in the prior year. For the next year, the market is expecting a contraction of 45.2% in earnings ($1.15 versus $2.10).
- You can view the full Digital Realty Ratings Report.