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 Realogy Holdings ( RLGY) 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 Realogy Holdings as such a stock due to the following factors:
- RLGY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $62.7 million.
- RLGY has traded 837,865 shares today.
- RLGY traded in a range 217.7% of the normal price range with a price range of $1.95.
- RLGY traded below its daily resistance level (quality: 507 days, meaning that the stock is crossing a resistance level set by the last 507 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in RLGY with the Ticky from Trade-Ideas. See the FREE profile for RLGY NOW at Trade-Ideas More details on RLGY: Realogy Holdings Corp. provides real estate and relocation services worldwide. RLGY has a PE ratio of 15.6. Currently there are 6 analysts that rate Realogy Holdings a buy, 1 analyst rates it a sell, and 1 rates it a hold. The average volume for Realogy Holdings has been 1.6 million shares per day over the past 30 days. Realogy has a market cap of $6.1 billion and is part of the financial sector and real estate industry. Shares are down 15% year-to-date as of the close of trading on Wednesday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Realogy Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 2.08 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, RLGY maintains a poor quick ratio of 0.70, which illustrates the inability to avoid short-term cash problems.
- RLGY has underperformed the S&P 500 Index, declining 11.68% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- REALOGY HOLDINGS CORP 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, REALOGY HOLDINGS CORP turned its bottom line around by earning $2.96 versus -$3.73 in the prior year. For the next year, the market is expecting a contraction of 44.2% in earnings ($1.65 versus $2.96).
- The gross profit margin for REALOGY HOLDINGS CORP is rather low; currently it is at 22.23%. Regardless of RLGY's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RLGY's net profit margin of 25.68% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 258.82% to $162.00 million when compared to the same quarter last year. In addition, REALOGY HOLDINGS CORP has also vastly surpassed the industry average cash flow growth rate of -70.61%.
- You can view the full Realogy Holdings Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.