Trade-Ideas LLC identified

Heritage Insurance Holdings

(

HRTG

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Heritage Insurance Holdings as such a stock due to the following factors:

  • HRTG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.6 million.
  • HRTG has traded 55,848 shares today.
  • HRTG is trading at 4.77 times the normal volume for the stock at this time of day.
  • HRTG is trading at a new low 3.03% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 HRTG:

Heritage Insurance Holdings, Inc., a property and casualty insurance company, provides personal and commercial residential insurance products. The stock currently has a dividend yield of 1.4%. HRTG has a PE ratio of 5. Currently there are 3 analysts that rate Heritage Insurance Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Heritage Insurance Holdings has been 233,100 shares per day over the past 30 days. Heritage has a market cap of $449.9 million and is part of the financial sector and insurance industry. Shares are down 33.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Heritage Insurance Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 18.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • HRTG has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • 45.45% is the gross profit margin for HERITAGE INSURANCE HOLDINGS which we consider to be strong. Regardless of HRTG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HRTG's net profit margin of 19.97% significantly outperformed against the industry.
  • HRTG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.95%, which is also worse than the performance of the S&P 500 Index. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Net operating cash flow has significantly decreased to $36.32 million or 74.21% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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