China HGS Real Estate (HGSH) Is Today's Strong On High Volume Stock

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 China HGS Real Estate ( HGSH) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified China HGS Real Estate as such a stock due to the following factors:

  • HGSH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.3 million.
  • HGSH has traded 409,739 shares today.
  • HGSH is trading at 96.18 times the normal volume for the stock at this time of day.
  • HGSH is trading at a new high 15.07% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on HGSH:

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. HGSH has a PE ratio of 8.7.

The average volume for China HGS Real Estate has been 205,700 shares per day over the past 30 days. China HGS Real Estate has a market cap of $278.9 million and is part of the financial sector and real estate industry. The stock has a beta of -1.88 and a short float of 0.1% with 0.00 days to cover. Shares are up 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 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 notable return on equity. 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 the ratings report include:
  • HGSH's very impressive revenue growth greatly exceeded the industry average of 10.7%. 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.

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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