Trade-Ideas: Hyatt Hotels (H) Is Today's "Barbarian At The Gate" Stock
Trade-Ideas LLC identified Hyatt Hotels ( H) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Hyatt Hotels as such a stock due to the following factors:
- H has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.6 million.
- H has traded 1.2 million shares today.
- H traded in a range 200.6% of the normal price range with a price range of $2.41.
- H traded above its daily resistance level (quality: 154 days, meaning that the stock is crossing a resistance level set by the last 154 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on H: Hyatt Hotels Corporation, a hospitality company, develops, owns, operates, manages, franchises, licenses, or provides services to full and select service hotels, resorts, and residential and vacation properties. H has a PE ratio of 57. Currently there are 6 analysts that rate Hyatt Hotels a buy, 1 analyst rates it a sell, and 5 rate it a hold. The average volume for Hyatt Hotels has been 622,100 shares per day over the past 30 days. Hyatt Hotels has a market cap of $6.6 billion and is part of the services sector and leisure industry. Shares are up 5.7% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Hyatt Hotels as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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.
- Net operating cash flow has increased to $142.00 million or 27.92% when compared to the same quarter last year. In addition, HYATT HOTELS CORP has also vastly surpassed the industry average cash flow growth rate of -72.96%.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
- HYATT HOTELS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HYATT HOTELS CORP reported lower earnings of $0.86 versus $2.25 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $0.86).
- The gross profit margin for HYATT HOTELS CORP is rather low; currently it is at 21.28%. Regardless of H's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, H's net profit margin of 3.33% is significantly lower than the industry average.
- You can view the full Hyatt Hotels Ratings Report.
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