Trade-Ideas LLC identified

Starwood Property

(

STWD

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

  • STWD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.0 million.
  • STWD has traded 199,290 shares today.
  • STWD is trading at 2.23 times the normal volume for the stock at this time of day.
  • STWD is trading at a new low 3.03% 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 STWD:

Starwood Property Trust, Inc. originates, acquires, finances, and manages commercial mortgage loans, other commercial real estate debt investments, commercial mortgage-backed securities, and other commercial real estate- investments in the United States and Europe. The stock currently has a dividend yield of 10.2%. STWD has a PE ratio of 29. Currently there are 5 analysts that rate Starwood Property a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Starwood Property has been 2.8 million shares per day over the past 30 days. Starwood Property has a market cap of $4.5 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.32 and a short float of 3.9% with 3.00 days to cover. Shares are down 6.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Starwood Property as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry average. The net income increased by 5.4% when compared to the same quarter one year prior, going from $91.51 million to $96.45 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 49.17% is the gross profit margin for STARWOOD PROPERTY TRUST INC which we consider to be strong. Regardless of STWD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STWD's net profit margin of 50.19% significantly outperformed against the industry.
  • STWD has underperformed the S&P 500 Index, declining 22.95% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, STARWOOD PROPERTY TRUST INC's return on equity is below that of both the industry average and the S&P 500.

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