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 $16.9 million.
  • MTH has traded 90,799 shares today.
  • MTH is trading at 3.74 times the normal volume for the stock at this time of day.
  • MTH is trading at a new high 3.06% 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 14. Currently there are 3 analysts that rate Meritage Homes a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Meritage Homes has been 494,000 shares per day over the past 30 days. Meritage Homes has a market cap of $1.7 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.96 and a short float of 16.9% with 13.36 days to cover. Shares are up 23.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Meritage Homes as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • MTH's revenue growth has slightly outpaced the industry average of 12.9%. Since the same quarter one year prior, revenues rose by 18.2%. 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 slightly increased to -$38.76 million or 9.83% when compared to the same quarter last year. In addition, MERITAGE HOMES CORP has also vastly surpassed the industry average cash flow growth rate of -103.90%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • MERITAGE HOMES CORP's earnings per share declined by 17.6% 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, MERITAGE HOMES CORP increased its bottom line by earning $3.45 versus $3.24 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $3.45).

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