3 Stocks Boosting The Real Estate Industry Higher

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.

Two out of the three major indices traded up today The three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading up 5 points (0.0%) at 16,911 as of Thursday, June 19, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,514 issues advancing vs. 1,469 declining with 176 unchanged.

The Real Estate industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.1%. Top gainers within the Real Estate industry included Vestin Realty Mortgage II ( VRTB), up 4.0%, Supertel Hospitality ( SPPR), up 2.1%, IFM Investments ( CTC), up 2.3%, China HGS Real Estate ( HGSH), up 3.5% and Transcontinental Realty Investors ( TCI), up 1.8%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

China HGS Real Estate ( HGSH) is one of the companies that pushed the Real Estate industry higher today. China HGS Real Estate was up $0.13 (3.5%) to $3.83 on heavy volume. Throughout the day, 17,584 shares of China HGS Real Estate exchanged hands as compared to its average daily volume of 9,900 shares. The stock ranged in a price between $3.71-$4.40 after having opened the day at $3.76 as compared to the previous trading day's close of $3.70.

China HGS Real Estate, Inc., through its subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd, develops real estate properties in the People's Republic of China. It is involved in the construction and sale of residential apartments, parking lots, and commercial properties. China HGS Real Estate has a market cap of $170.7 million and is part of the financial sector. Shares are down 37.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate China HGS Real Estate a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates China HGS Real Estate as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on HGSH go as follows:

  • HGSH's very impressive revenue growth greatly exceeded the industry average of 41.2%. Since the same quarter one year prior, revenues leaped by 157.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CHINA HGS REAL ESTATE 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. During the past fiscal year, CHINA HGS REAL ESTATE INC increased its bottom line by earning $0.46 versus $0.11 in the prior year.
  • HGSH's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.13 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for CHINA HGS REAL ESTATE INC is currently lower than what is desirable, coming in at 33.12%. It has decreased from the same quarter the previous year. Despite the weak results of the gross profit margin, the net profit margin of 28.67% has significantly outperformed against the industry average.
  • Net operating cash flow has significantly decreased to -$3.65 million or 2084.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: China HGS Real Estate Ratings Report

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At the close, IFM Investments ( CTC) was up $0.03 (2.3%) to $1.33 on average volume. Throughout the day, 30,615 shares of IFM Investments exchanged hands as compared to its average daily volume of 26,600 shares. The stock ranged in a price between $1.29-$1.36 after having opened the day at $1.31 as compared to the previous trading day's close of $1.30.

IFM Investments Limited, through its subsidiaries, provides real estate services in the People's Republic of China. It operates through four segments: Company-Owned Brokerage Services, Franchise Services, Mortgage Management Services, and Primary and Commercial Services. IFM Investments has a market cap of $18.9 million and is part of the financial sector. Shares are down 36.6% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate IFM Investments a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates IFM Investments as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CTC go as follows:

  • IFM INVESTMENTS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, IFM INVESTMENTS LTD reported poor results of -$0.92 versus -$0.57 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Management & Development industry. The net income has significantly decreased by 981.5% when compared to the same quarter one year ago, falling from $0.87 million to -$7.63 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Real Estate Management & Development industry and the overall market, IFM INVESTMENTS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 56.56%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 950.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • CTC, with its decline in revenue, slightly underperformed the industry average of 41.2%. Since the same quarter one year prior, revenues fell by 48.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

You can view the full analysis from the report here: IFM Investments 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.

Supertel Hospitality ( SPPR) was another company that pushed the Real Estate industry higher today. Supertel Hospitality was up $0.03 (2.1%) to $1.45 on light volume. Throughout the day, 13,774 shares of Supertel Hospitality exchanged hands as compared to its average daily volume of 20,400 shares. The stock ranged in a price between $1.40-$1.49 after having opened the day at $1.42 as compared to the previous trading day's close of $1.42.

Supertel Hospitality, Inc. is an independent equity real estate investment trust. The firm invests in the real estate markets of the United States. It primarily invests in limited-service hotels. The firm was formerly known as Humphrey Hospitality Trust, Inc. Supertel Hospitality, Inc. Supertel Hospitality has a market cap of $4.3 million and is part of the financial sector. Shares are down 41.8% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Supertel Hospitality a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Supertel Hospitality as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on SPPR go as follows:

  • SPPR'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 78.95%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SUPERTEL HOSPITALITY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SPPR, with its decline in revenue, underperformed when compared the industry average of 10.3%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 53.28% to -$0.18 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 30.47%.
  • SUPERTEL HOSPITALITY 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. During the past fiscal year, SUPERTEL HOSPITALITY INC continued to lose money by earning -$1.38 versus -$4.96 in the prior year.

You can view the full analysis from the report here: Supertel Hospitality 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.

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.

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