Trade-Ideas LLC identified

Welltower

(

HCN

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

  • HCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $142.6 million.
  • HCN has traded 598,965 shares today.
  • HCN traded in a range 264.6% of the normal price range with a price range of $3.67.
  • HCN traded below its daily resistance level (quality: 43 days, meaning that the stock is crossing a resistance level set by the last 43 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 HCN:

TST Recommends

Welltower Inc. is an independent equity real estate investment trust. The firm engages in acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States. The stock currently has a dividend yield of 4.9%. HCN has a PE ratio of 27. Currently there are 6 analysts that rate Welltower a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Welltower has been 2.3 million shares per day over the past 30 days. Welltower has a market cap of $24.0 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.15 and a short float of 3.8% with 5.15 days to cover. Shares are down 11.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Welltower as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • HCN's revenue growth has slightly outpaced the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 17.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • WELLTOWER INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WELLTOWER INC increased its bottom line by earning $1.40 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus $1.40).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 273.0% when compared to the same quarter one year prior, rising from $88.18 million to $328.93 million.
  • 36.37% is the gross profit margin for WELLTOWER INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 34.47% is above that of the industry average.

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