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 $22.0 million.
  • MTH has traded 187,137 shares today.
  • MTH is trading at 10.09 times the normal volume for the stock at this time of day.
  • MTH is trading at a new high 16.26% 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 Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee in the United States. The company operates through two segments, Homebuilding and Financial Services. MTH has a PE ratio of 9. Currently there are 4 analysts that rate Meritage Homes a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Meritage Homes has been 426,800 shares per day over the past 30 days. Meritage Homes has a market cap of $1.1 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.50 and a short float of 13% with 5.36 days to cover. Shares are down 17.3% year-to-date as of the close of trading on Wednesday.

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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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.7%. Since the same quarter one year prior, revenues rose by 20.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MTH's debt-to-equity ratio of 0.95 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income has decreased by 7.0% when compared to the same quarter one year ago, dropping from $32.58 million to $30.31 million.
  • 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. In comparison to the other companies in the Household Durables industry and the overall market, MERITAGE HOMES CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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