Water-Logged And Getting Wetter Stock Of The Day: Prologis (PLD)

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 Prologis ( PLD) 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 Prologis as such a stock due to the following factors:

  • PLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $86.8 million.
  • PLD has traded 1.0 million shares today.
  • PLD traded in a range 211.5% of the normal price range with a price range of $0.96.
  • PLD traded below its daily resistance level (quality: 217 days, meaning that the stock is crossing a resistance level set by the last 217 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.

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More details on PLD:

Prologis Inc. is an independent equity real estate investment trust. It invests in the real estate markets across the globe. The firm engages in the ownership, development, management, and leasing of industrial distribution and retail properties. The stock currently has a dividend yield of 3.2%. PLD has a PE ratio of 1016.2. Currently there are 13 analysts that rate Prologis a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Prologis has been 1.9 million shares per day over the past 30 days. Prologis has a market cap of $20.3 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.51 and a short float of 1.3% with 2.90 days to cover. Shares are up 9.4% year-to-date as of the close of trading on Thursday.

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 Prologis as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • PLD's revenue growth has slightly outpaced the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 14.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 3431.1% when compared to the same quarter one year prior, rising from $2.30 million to $81.18 million.
  • PROLOGIS 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PROLOGIS INC turned its bottom line around by earning $0.42 versus -$0.34 in the prior year. For the next year, the market is expecting a contraction of 19.0% in earnings ($0.34 versus $0.42).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, PROLOGIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PROLOGIS INC is rather low; currently it is at 24.99%. Regardless of PLD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 16.69% trails the industry average.

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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