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

Realogy Holdings

(

RLGY

) 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 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 $95.4 million.
  • RLGY has traded 405,703 shares today.
  • RLGY is trading at 1.79 times the normal volume for the stock at this time of day.
  • RLGY 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.

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

More details on RLGY:

TheStreet Recommends

Realogy Holdings Corp. provides real estate and relocation services worldwide. RLGY has a PE ratio of 12.8. Currently there are 9 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 1.5 million shares per day over the past 30 days. Realogy has a market cap of $5.8 billion and is part of the financial sector and real estate industry. Shares are down 20.1% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Realogy Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Management & Development industry. The net income has decreased by 19.0% when compared to the same quarter one year ago, dropping from $84.00 million to $68.00 million.
  • Although RLGY's debt-to-equity ratio of 2.05 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, RLGY maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for REALOGY HOLDINGS CORP is rather low; currently it is at 24.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.49% trails that of the industry average.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, RLGY has underperformed the S&P 500 Index, declining 9.45% 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.
  • REALOGY HOLDINGS CORP's earnings per share declined by 19.3% 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, REALOGY HOLDINGS CORP turned its bottom line around by earning $2.96 versus -$3.73 in the prior year. For the next year, the market is expecting a contraction of 63.3% in earnings ($1.09 versus $2.96).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null