Trade-Ideas LLC identified

Prologis

(

PLD

) 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 Prologis as such a stock due to the following factors:

  • PLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $124.6 million.
  • PLD has traded 1.4 million shares today.
  • PLD traded in a range 266.3% of the normal price range with a price range of $2.01.
  • PLD traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 PLD:

Prologis Inc. is an independent equity real estate investment trust. It invests in the real estate markets across the globe. The firm engages in the ownership, development, management, and leasing of industrial distribution and retail properties. The stock currently has a dividend yield of 3.8%. PLD has a PE ratio of 27. Currently there are 14 analysts that rate Prologis a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Prologis has been 3.4 million shares per day over the past 30 days. Prologis has a market cap of $23.0 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.73 and a short float of 2.2% with 3.44 days to cover. Shares are up 1.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Prologis as a

buy

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 37.2%. 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 increased to $313.60 million or 23.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.63%.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PROLOGIS INC's return on equity is below that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that PLD's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • PROLOGIS INC 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PROLOGIS INC increased its bottom line by earning $1.64 versus $1.18 in the prior year. For the next year, the market is expecting a contraction of 70.1% in earnings ($0.49 versus $1.64).

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