Trade-Ideas LLC identified

TRI Pointe Group

(

TPH

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

  • TPH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.9 million.
  • TPH has traded 333,114 shares today.
  • TPH is trading at 6.53 times the normal volume for the stock at this time of day.
  • TPH is trading at a new low 4.08% 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 TPH:

TRI Pointe Group, Inc., through its subsidiary, TRI Pointe Homes, Inc. designs, constructs, and sells single-family homes in the United States. The company also develops and sells land and lots. TPH has a PE ratio of 1. Currently there are 4 analysts that rate TRI Pointe Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for TRI Pointe Group has been 1.9 million shares per day over the past 30 days. TRI Pointe Group has a market cap of $1.6 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.44 and a short float of 9.8% with 7.76 days to cover. Shares are down 24.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates TRI Pointe Group as a

sell

. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:

  • The gross profit margin for TRI POINTE GROUP INC is rather low; currently it is at 21.42%. Regardless of TPH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, TPH's net profit margin of 7.73% compares favorably to the industry average.
  • TPH's debt-to-equity ratio of 0.79 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
  • In comparison to the other companies in the Household Durables industry and the overall market, TRI POINTE GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • TPH'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 33.05%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.
  • TRI POINTE GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.20 versus $0.33).

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