Strong On High Relative Volume: Duke Realty (DRE)

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 Duke Realty ( DRE) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Duke Realty as such a stock due to the following factors:

  • DRE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.4 million.
  • DRE has traded 183,111 shares today.
  • DRE is trading at 4.05 times the normal volume for the stock at this time of day.
  • DRE is trading at a new high 3.05% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on DRE:

Duke Realty Corporation is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It offers a single point of responsibility for all aspects of a project, including leasing, asset management, construction and development. The stock currently has a dividend yield of 3.5%. DRE has a PE ratio of 30.1. Currently there are 6 analysts that rate Duke Realty a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Duke Realty has been 2.4 million shares per day over the past 30 days. Duke has a market cap of $6.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.88 and a short float of 1.9% with 2.44 days to cover. Shares are down 3.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Duke Realty as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, reasonable valuation levels, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over 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 158.5% when compared to the same quarter one year prior, rising from $25.24 million to $65.24 million.
  • DUKE REALTY CORP 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DUKE REALTY CORP increased its bottom line by earning $0.55 versus $0.06 in the prior year. For the next year, the market is expecting a contraction of 91.8% in earnings ($0.05 versus $0.55).
  • DRE, 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 7.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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