Trade-Ideas: Sunstone Hotel Investors (SHO) Is Today's Strong And Under The Radar 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 Sunstone Hotel Investors ( SHO) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Sunstone Hotel Investors as such a stock due to the following factors:

  • SHO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.4 million.
  • SHO is making at least a new 3-day high.
  • SHO has a PE ratio of 53.6.
  • SHO is mentioned 1.52 times per day on StockTwits.
  • SHO has not yet been mentioned on StockTwits today.
  • SHO is currently in the upper 20% of its 1-year range.
  • SHO is in the upper 35% of its 20-day range.
  • SHO is in the upper 45% of its 5-day range.
  • SHO 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 SHO:

Sunstone Hotel Investors, Inc. operates as a real estate investment trust. The firm engages in the acquisition, ownership, asset management, renovation, and sale of luxury, upper upscale, and upscale full-service hotels in the United States. Its portfolio also includes mid-scale hotels. The stock currently has a dividend yield of 9%. SHO has a PE ratio of 53.6. Currently there is 1 analyst that rates Sunstone Hotel Investors a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Sunstone Hotel Investors has been 1.6 million shares per day over the past 30 days. Sunstone Hotel Investors has a market cap of $3.3 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.33 and a short float of 3.4% with 3.61 days to cover. Shares are up 19.5% 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 Sunstone Hotel Investors as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • SHO's revenue growth has slightly outpaced the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 23.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 27.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SHO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SUNSTONE HOTEL INVESTORS 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 year. We feel that this trend should continue. During the past fiscal year, SUNSTONE HOTEL INVESTORS INC continued to lose money by earning -$0.03 versus -$0.26 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.03).
  • 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 126.8% when compared to the same quarter one year prior, rising from $14.04 million to $31.84 million.

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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