CyrusOne (CONE): Today's Weak On High Volume 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 CyrusOne ( CONE) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified CyrusOne as such a stock due to the following factors:

  • CONE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.9 million.
  • CONE has traded 91,766 shares today.
  • CONE is trading at 4.06 times the normal volume for the stock at this time of day.
  • CONE is trading at a new low 3.08% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 CONE:

CyrusOne Inc., a real estate investment trust (REIT), owns, operates, and develops enterprise-class, carrier-neutral, and multi-tenant data center properties. The stock currently has a dividend yield of 4.2%. Currently there are 9 analysts that rate CyrusOne a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for CyrusOne has been 628,000 shares per day over the past 30 days. CyrusOne has a market cap of $1.6 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.95 and a short float of 3.8% with 2.51 days to cover. Shares are up 10.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CyrusOne as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • CONE's revenue growth has slightly outpaced the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 10.6%. 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.
  • This stock has managed to rise its share value by 30.20% over the past twelve months. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • CYRUSONE INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CYRUSONE INC continued to lose money by earning -$0.25 versus -$1.32 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus -$0.25).
  • The gross profit margin for CYRUSONE INC is currently extremely low, coming in at 5.25%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -5.01% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $33.30 million or 12.13% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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