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 Ventas ( VTR) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ventas as such a stock due to the following factors:
- VTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $151.5 million.
- VTR has traded 851,369 shares today.
- VTR is trading at 1.72 times the normal volume for the stock at this time of day.
- VTR crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in VTR with the Ticky from Trade-Ideas. See the FREE profile for VTR NOW at Trade-Ideas More details on VTR: Ventas, Inc. is a publicly owned real estate investment trust. The firm engages in investment, management, financing, and leasing of properties in the healthcare industry. It invests in the real estate markets of the United States and Canada. The stock currently has a dividend yield of 4.6%. VTR has a PE ratio of 38.6. Currently there are 3 analysts that rate Ventas a buy, 3 analysts rate it a sell, and 6 rate it a hold. The average volume for Ventas has been 1.8 million shares per day over the past 30 days. Ventas has a market cap of $18.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.44 and a short float of 2.2% with 2.29 days to cover. Shares are up 10.4% year-to-date as of the close of trading on Monday. 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 Ventas as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, increase in net income, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 8.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- VENTAS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VENTAS INC increased its bottom line by earning $1.66 versus $1.04 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.66).
- The net income growth from the same quarter one year ago has exceeded that of the Real Estate Investment Trusts (REITs) industry average, but is less than that of the S&P 500. The net income increased by 7.9% when compared to the same quarter one year prior, going from $112.19 million to $121.05 million.
- Net operating cash flow has increased to $284.42 million or 23.49% when compared to the same quarter last year. Despite an increase in cash flow, VENTAS INC's average is still marginally south of the industry average growth rate of 30.47%.
- You can view the full Ventas 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.