Diamond Resorts International (DRII) Showing Signs Of Being Strong And Under The Radar

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 Diamond Resorts International ( DRII) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Diamond Resorts International as such a stock due to the following factors:

  • DRII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.8 million.
  • DRII is making at least a new 3-day high.
  • DRII has a PE ratio of 48.1.
  • DRII is mentioned 1.52 times per day on StockTwits.
  • DRII has not yet been mentioned on StockTwits today.
  • DRII is currently in the upper 20% of its 1-year range.
  • DRII is in the upper 35% of its 20-day range.
  • DRII is in the upper 45% of its 5-day range.
  • DRII is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on DRII:

Diamond Resorts International, Inc. operates in the hospitality and vacation ownership industry in the United States, Hawaii, Canada, Mexico, the Caribbean, Central America, South America, Europe, Asia, Australia, and Africa. DRII has a PE ratio of 48.1. Currently there are 2 analysts that rate Diamond Resorts International a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Diamond Resorts International has been 381,600 shares per day over the past 30 days. Diamond Resorts International has a market cap of $2.0 billion and is part of the services sector and leisure industry. Shares are up 44.6% 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 Diamond Resorts International as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 3.46 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • This stock has increased by 43.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • DIAMOND RESORTS INTL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, DIAMOND RESORTS INTL swung to a loss, reporting -$0.04 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus -$0.04).
  • 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 Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, DIAMOND RESORTS INTL has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for DIAMOND RESORTS INTL is currently very high, coming in at 78.98%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.85% 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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