Trade-Ideas LLC identified

Chimera Investment

(

CIM

) 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 Chimera Investment as such a stock due to the following factors:

  • CIM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.2 million.
  • CIM has traded 4.1 million shares today.
  • CIM traded in a range 311.1% of the normal price range with a price range of $0.78.
  • CIM traded above its daily resistance level (quality: 11 days, meaning that the stock is crossing a resistance level set by the last 11 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 CIM:

Chimera Investment Corporation operates as a real estate investment trust in the United States. The stock currently has a dividend yield of 14.9%. CIM has a PE ratio of 2. Currently there is 1 analyst that rates Chimera Investment a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Chimera Investment has been 1.4 million shares per day over the past 30 days. Chimera Investment has a market cap of $2.4 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.66 and a short float of 2.3% with 2.35 days to cover. Shares are down 17.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Chimera Investment as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • The gross profit margin for CHIMERA INVESTMENT CORP is currently very high, coming in at 75.81%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CIM's net profit margin of -27.66% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 112.8% when compared to the same quarter one year ago, falling from $377.58 million to -$48.26 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, CHIMERA INVESTMENT CORP's return on equity is below that of both the industry average and the S&P 500.

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