Trade-Ideas LLC identified

La Quinta Holdings

(

LQ

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified La Quinta Holdings as such a stock due to the following factors:

  • LQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.1 million.
  • LQ has traded 303,700 shares today.
  • LQ is up 3% today.
  • LQ was down 10.4% yesterday.

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More details on LQ:

La Quinta Holdings Inc. owns, operates, and franchises select-service hotels under the La Quinta brand. It serves the upper-midscale and midscale segments. LQ has a PE ratio of 95. Currently there are 3 analysts that rate La Quinta Holdings a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for La Quinta Holdings has been 1.8 million shares per day over the past 30 days. La Quinta has a market cap of $1.5 billion and is part of the services sector and leisure industry. Shares are down 25.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates La Quinta Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • LQ's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 47.97%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Net operating cash flow has decreased to $49.24 million or 15.69% when compared to the same quarter last year. Despite a decrease in cash flow LA QUINTA HOLDINGS INC is still fairing well by exceeding its industry average cash flow growth rate of -53.39%.
  • 49.79% is the gross profit margin for LA QUINTA HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LQ's net profit margin of 3.42% significantly trails the industry average.
  • LA QUINTA HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LA QUINTA HOLDINGS INC turned its bottom line around by earning $0.20 versus -$2.66 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus $0.20).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 286.7% when compared to the same quarter one year prior, rising from -$4.19 million to $7.83 million.

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