HomeAway (AWAY) Weak On High Volume Today

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 HomeAway ( AWAY) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified HomeAway as such a stock due to the following factors:

  • AWAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.5 million.
  • AWAY has traded 207,357 shares today.
  • AWAY is trading at 6.66 times the normal volume for the stock at this time of day.
  • AWAY is trading at a new low 8.09% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 AWAY:

HomeAway, Inc., together with its subsidiaries, operates an online vacation rental property marketplace that enables property owners and managers to market properties for rental to vacation travelers. AWAY has a PE ratio of 205.1. Currently there are 10 analysts that rate HomeAway a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for HomeAway has been 1.1 million shares per day over the past 30 days. HomeAway has a market cap of $3.3 billion and is part of the technology sector and internet industry. The stock has a beta of 0.72 and a short float of 9.5% with 7.68 days to cover. Shares are down 17.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HomeAway as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 31.9%. 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.
  • The gross profit margin for HOMEAWAY INC is currently very high, coming in at 85.79%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 3.38% is above that of the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.33, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.28 is very high and demonstrates very strong liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Internet & Catalog Retail industry. The net income has significantly decreased by 29.3% when compared to the same quarter one year ago, falling from $5.47 million to $3.87 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market, HOMEAWAY INC's return on equity significantly trails that of both the industry average and the S&P 500.

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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