General Growth Properties (GGP) Spotted As Roof Leaker 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.

Trade-Ideas LLC identified General Growth Properties ( GGP) 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 General Growth Properties as such a stock due to the following factors:

  • GGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $108.9 million.
  • GGP has traded 4.7 million shares today.
  • GGP is trading at 1.92 times the normal volume for the stock at this time of day.
  • GGP 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in GGP with the Ticky from Trade-Ideas. See the FREE profile for GGP NOW at Trade-Ideas

More details on GGP:

General Growth Properties, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It engages in owning, managing, leasing, and redeveloping high-quality regional malls. General Growth Properties, Inc is based in Chicago, Illinois. The stock currently has a dividend yield of 2.4%. GGP has a PE ratio of 23.3. Currently there are 9 analysts that rate General Growth Properties a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for General Growth Properties has been 4.7 million shares per day over the past 30 days. General Growth has a market cap of $24.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.60 and a short float of 1.5% with 1.61 days to cover. Shares are down 0.8% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates General Growth Properties as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • GENERAL GROWTH PPTYS 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 two years. We feel that this trend should continue. During the past fiscal year, GENERAL GROWTH PPTYS INC increased its bottom line by earning $0.39 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus $0.39).
  • 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 395.7% when compared to the same quarter one year prior, rising from $128.04 million to $634.73 million.
  • 37.51% is the gross profit margin for GENERAL GROWTH PPTYS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 101.35% significantly outperformed against the industry average.
  • GGP, with its decline in revenue, underperformed when compared the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Dow Rises Sharply as U.S.-China Trade Tensions Thaw

Dow Rises Sharply as U.S.-China Trade Tensions Thaw

To Win at Trade the U.S. Must Act and Behave Like China

To Win at Trade the U.S. Must Act and Behave Like China

Video: Jim Cramer on Tariffs, the Market Rally, Caterpillar and Micron

Video: Jim Cramer on Tariffs, the Market Rally, Caterpillar and Micron

Apple Shares Gain as U.S. and China Call Off Trade War, For Now

Apple Shares Gain as U.S. and China Call Off Trade War, For Now

GE Confirms $11.1 Billion Transportation Merger With Wabtec

GE Confirms $11.1 Billion Transportation Merger With Wabtec