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.

Trade-Ideas LLC identified

Realogy Holdings

(

RLGY

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Realogy Holdings as such a stock due to the following factors:

  • RLGY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.5 million.
  • RLGY has traded 256,240 shares today.
  • RLGY traded in a range 236.5% of the normal price range with a price range of $2.07.
  • RLGY traded below its daily resistance level (quality: 41 days, meaning that the stock is crossing a resistance level set by the last 41 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on RLGY:

Realogy Holdings Corp. provides real estate and relocation services worldwide. RLGY has a PE ratio of 46. Currently there are 6 analysts that rate Realogy Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Realogy Holdings has been 869,300 shares per day over the past 30 days. Realogy has a market cap of $7.2 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.99 and a short float of 2.9% with 5.64 days to cover. Shares are up 11.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Realogy Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • RLGY's revenue growth trails the industry average of 18.2%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • REALOGY HOLDINGS CORP has improved earnings per share by 31.3% 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, REALOGY HOLDINGS CORP reported lower earnings of $0.96 versus $2.96 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $0.96).
  • Currently the debt-to-equity ratio of 1.93 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, RLGY maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Real Estate Management & Development industry and the overall market, REALOGY HOLDINGS CORP's return on equity is below that of both the industry average and the S&P 500.

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