Strong On High Relative Volume: HomeAway (AWAY)

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

  • AWAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.9 million.
  • AWAY has traded 369,215 shares today.
  • AWAY is trading at 2.26 times the normal volume for the stock at this time of day.
  • AWAY is trading at a new high 5.02% 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 AWAY:

HomeAway, Inc., together with its subsidiaries, operates an online vacation rental property marketplace that enables property owners and managers to market properties for rental to vacation travelers. AWAY has a PE ratio of 409. Currently there are 12 analysts that rate HomeAway a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for HomeAway has been 1.4 million shares per day over the past 30 days. HomeAway has a market cap of $2.7 billion and is part of the technology sector and internet industry. The stock has a beta of 1.02 and a short float of 6.9% with 6.93 days to cover. Shares are down 5.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HomeAway as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • AWAY's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 12.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.48 is very high and demonstrates very strong liquidity.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, HOMEAWAY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of HOMEAWAY INC has not done very well: it is down 8.31% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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