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
) 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 DR Horton as such a stock due to the following factors:
- DHI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $137.1 million.
- DHI has traded 321,465 shares today.
- DHI is trading at 10.71 times the normal volume for the stock at this time of day.
- DHI 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 DHI with the Ticky from Trade-Ideas. See the FREE profile for DHI NOW at Trade-Ideas
More details on DHI:
D.R. Horton, Inc. operates as a homebuilding company. It is engaged in the acquisition and development of land; and construction and sale of residential homes in 27 states and 78 markets in the United States under the D.R. Horton, America's Builder, Emerald Homes, and Breland Homes. DHI has a PE ratio of 16.5. Currently there are 9 analysts that rate DR Horton a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for DR Horton has been 7.1 million shares per day over the past 30 days. DR Horton has a market cap of $7.1 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.67 and a short float of 17.9% with 8.26 days to cover. Shares are down 6.5% year-to-date as of the close of trading on Friday.
rates DR Horton as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- DHI's revenue growth has slightly outpaced the industry average of 29.8%. Since the same quarter one year prior, revenues rose by 39.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to -$94.80 million or 21.58% when compared to the same quarter last year. Despite an increase in cash flow of 21.58%, D R HORTON INC is still growing at a significantly lower rate than the industry average of 72.06%.
- D R HORTON INC has improved earnings per share by 33.3% 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, D R HORTON INC reported lower earnings of $1.34 versus $2.74 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $1.34).
- DHI's debt-to-equity ratio of 0.86 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.
- You can view the full DR Horton Ratings Report.