Water-Logged And Getting Wetter Stock Of The Day: CBRE Group (CBG)

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 CBRE Group ( CBG) 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 CBRE Group as such a stock due to the following factors:

  • CBG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.6 million.
  • CBG has traded 1.5 million shares today.
  • CBG traded in a range 212.4% of the normal price range with a price range of $0.96.
  • CBG traded below its daily resistance level (quality: 15 days, meaning that the stock is crossing a resistance level set by the last 15 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 CBG:

CBRE Group, Inc. operates as a commercial real estate services and investment company worldwide. The company operates through Americas; Europe, Middle East and Africa; Asia Pacific; Global Investment Management; and Development Services segments. CBG has a PE ratio of 28.6. Currently there are 4 analysts that rate CBRE Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for CBRE Group has been 1.7 million shares per day over the past 30 days. CBRE Group has a market cap of $11.2 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.49 and a short float of 1.1% with 2.71 days to cover. Shares are up 26.6% 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 CBRE Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 31.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Real Estate Management & Development industry average. The net income increased by 13.4% when compared to the same quarter one year prior, going from $94.44 million to $107.10 million.
  • Net operating cash flow has significantly increased by 95.01% to $292.46 million when compared to the same quarter last year. In addition, CBRE GROUP INC has also vastly surpassed the industry average cash flow growth rate of -41.58%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 38.82% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • CBRE GROUP INC has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, CBRE GROUP INC reported lower earnings of $0.94 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($1.72 versus $0.94).

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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