Boston Properties (BXP) Marked As Today's Roof Leaker 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.

Trade-Ideas LLC identified Boston Properties ( BXP) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Boston Properties as such a stock due to the following factors:

  • BXP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.7 million.
  • BXP has traded 597,848 shares today.
  • BXP is trading at 2.20 times the normal volume for the stock at this time of day.
  • BXP crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on BXP:

Boston Properties, Inc., a real estate investment trust (REIT), together with its subsidiaries, engages in the ownership and development of office properties. The stock currently has a dividend yield of 2%. BXP has a PE ratio of 37.0. Currently there are 13 analysts that rate Boston Properties a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Boston Properties has been 764,600 shares per day over the past 30 days. Boston has a market cap of $20.4 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.12 and a short float of 2% with 3.38 days to cover. Shares are up 3.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Boston Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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 206.7% when compared to the same quarter one year prior, rising from $56.66 million to $173.77 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 35.09% is the gross profit margin for BOSTON PROPERTIES INC which we consider to be strong. 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 27.36% trails the industry average.
  • BOSTON PROPERTIES INC 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BOSTON PROPERTIES INC reported lower earnings of $2.82 versus $4.02 in the prior year. For the next year, the market is expecting a contraction of 30.5% in earnings ($1.96 versus $2.82).

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