Trade-Ideas LLC identified

Meritage Homes

(

MTH

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

  • MTH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.3 million.
  • MTH has traded 104,261 shares today.
  • MTH is trading at 7.52 times the normal volume for the stock at this time of day.
  • MTH is trading at a new high 4.10% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 MTH:

Meritage Homes Corporation designs and builds single-family detached homes in the United States. The company operates through two segments, Homebuilding and Financial Services. MTH has a PE ratio of 11. Currently there are 3 analysts that rate Meritage Homes a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Meritage Homes has been 379,600 shares per day over the past 30 days. Meritage Homes has a market cap of $1.3 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.24 and a short float of 8.9% with 4.49 days to cover. Shares are down 0.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Meritage Homes as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • MTH's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 15.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MERITAGE HOMES CORP has improved earnings per share by 25.0% 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, MERITAGE HOMES CORP reported lower earnings of $3.09 versus $3.45 in the prior year. This year, the market expects an improvement in earnings ($3.52 versus $3.09).
  • The gross profit margin for MERITAGE HOMES CORP is rather low; currently it is at 18.07%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.49% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$81.82 million or 114.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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