Trade-Ideas LLC identified

National Health Investors

(

NHI

) 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 National Health Investors as such a stock due to the following factors:

  • NHI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.2 million.
  • NHI has traded 265,159 shares today.
  • NHI traded in a range 219.7% of the normal price range with a price range of $2.25.
  • NHI traded above its daily resistance level (quality: 507 days, meaning that the stock is crossing a resistance level set by the last 507 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 NHI:

National Health Investors Inc. is a real estate investment trust. It invests in the real estate markets of United States. The firm invests in the health care properties primarily in the long-term care and senior housing industries. The stock currently has a dividend yield of 5%. NHI has a PE ratio of 72. Currently there is 1 analyst that rates National Health Investors a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for National Health Investors has been 213,700 shares per day over the past 30 days. National Health Investors has a market cap of $2.8 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.61 and a short float of 4% with 4.42 days to cover. Shares are up 19.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates National Health Investors as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.0%. Since the same quarter one year prior, revenues slightly increased by 5.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, NATIONAL HEALTH INVESTORS's return on equity exceeds that of both the industry average and the S&P 500.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • The gross profit margin for NATIONAL HEALTH INVESTORS is currently very high, coming in at 76.09%. Regardless of NHI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NHI's net profit margin of 55.82% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to $41.30 million or 7.08% when compared to the same quarter last year. Despite an increase in cash flow, NATIONAL HEALTH INVESTORS's average is still marginally south of the industry average growth rate of 11.45%.

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