Today's Perilous Reversal Stock: Hyatt Hotels Corporation (H)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Hyatt Hotels Corporation ( H) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Hyatt Hotels Corporation as such a stock due to the following factors:

  • H has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.9 million.
  • H has traded 376,603 shares today.
  • H is down 3.2% today.
  • H was up 7% yesterday.

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More details on H:

Global Hyatt is one of the world's top operators of full-service luxury hotels and resorts with more than 200 locations in about 40 countries. H has a PE ratio of 49.4. Currently there are 8 analysts that rate Hyatt Hotels Corporation a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Hyatt Hotels Corporation has been 301,700 shares per day over the past 30 days. Hyatt Hotels has a market cap of $2.3 billion and is part of the services sector and leisure industry. The stock has a beta of 1.58 and a short float of 3.3% with 2.32 days to cover. Shares are up 6.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hyatt Hotels Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • H's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 5.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • H's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, H has a quick ratio of 2.26, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 139.1% when compared to the same quarter one year prior, rising from $23.00 million to $55.00 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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