Essex Property (ESS) Showing Signs Of Being A Roof Leaker - TheStreet

Trade-Ideas LLC identified

Essex Property

(

ESS

) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Essex Property as such a stock due to the following factors:

  • ESS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $87.3 million.
  • ESS has traded 314,192 shares today.
  • ESS is trading at 1.96 times the normal volume for the stock at this time of day.
  • ESS crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ESS with the Ticky from Trade-Ideas. See the FREE profile for ESS NOW at Trade-Ideas

More details on ESS:

Essex Property Trust, Inc. operates as a self-administered and self-managed real estate investment trust in the United States. It engages in the ownership, operation, management, acquisition, development, and redevelopment of apartment communities, as well as commercial properties. The stock currently has a dividend yield of 2.5%. ESS has a PE ratio of 71. Currently there are 8 analysts that rate Essex Property a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Essex Property has been 324,400 shares per day over the past 30 days. Essex Property has a market cap of $15.1 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.33 and a short float of 1.8% with 2.40 days to cover. Shares are up 10% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Essex Property as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • ESS's revenue growth has slightly outpaced the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 1759.1% when compared to the same quarter one year prior, rising from $2.52 million to $46.87 million.
  • Net operating cash flow has increased to $124.50 million or 29.44% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.29%.
  • 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. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • ESSEX PROPERTY TRUST reported significant earnings per share improvement 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, ESSEX PROPERTY TRUST reported lower earnings of $2.08 versus $3.25 in the prior year. This year, the market expects an improvement in earnings ($2.78 versus $2.08).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.