Trade-Ideas LLC identified

Simon Property Group

(

SPG

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Simon Property Group as such a stock due to the following factors:

  • SPG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $208.4 million.
  • SPG has traded 498,688 shares today.
  • SPG traded in a range 211.2% of the normal price range with a price range of $6.03.
  • SPG traded below its daily resistance level (quality: 15 days, meaning that the stock is crossing a resistance level set by the last 15 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on SPG:

Simon Property Group, Inc. is an equity real estate investment trust. The firm invests in the real estate markets across the globe. It engages in investment, ownership, management, and development of properties. The stock currently has a dividend yield of 2.8%. SPG has a PE ratio of 39. Currently there are 13 analysts that rate Simon Property Group a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Simon Property Group has been 1.4 million shares per day over the past 30 days. Simon Property Group has a market cap of $69.5 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.57 and a short float of 2.4% with 6.26 days to cover. Shares are up 15.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Simon Property Group as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 11.4%. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SIMON PROPERTY GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for SIMON PROPERTY GROUP INC is rather high; currently it is at 60.79%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 33.75% trails the industry average.
  • Net operating cash flow has slightly increased to $720.46 million or 6.76% when compared to the same quarter last year. Despite an increase in cash flow, SIMON PROPERTY GROUP INC's average is still marginally south of the industry average growth rate of 9.08%.
  • 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.

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