3 Stocks Moving The Real Estate Industry Upward

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 46.37 points (-0.3%) at 17,373 as of Friday, Aug. 7, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,266 issues advancing vs. 1,814 declining with 130 unchanged.

The Real Estate industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.3%. Top gainers within the Real Estate industry included Amrep ( AXR), up 2.8%, China HGS Real Estate ( HGSH), up 3.2%, JAVELIN Mortgage Investment ( JMI), up 1.6%, Five Oaks Investment ( OAKS), up 2.0% and IRSA Inversiones y Representaciones ( IRS), up 3.1%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

JAVELIN Mortgage Investment ( JMI) is one of the companies that pushed the Real Estate industry higher today. JAVELIN Mortgage Investment was up $0.11 (1.6%) to $7.11 on average volume. Throughout the day, 47,917 shares of JAVELIN Mortgage Investment exchanged hands as compared to its average daily volume of 63,500 shares. The stock ranged in a price between $6.93-$7.15 after having opened the day at $7.00 as compared to the previous trading day's close of $7.00.

JAVELIN Mortgage Investment Corp., a real estate investment trust (REIT), invests primarily in fixed rate agency, and fixed rate and hybrid adjustable rate non-agency residential mortgage-backed securities in the United States. The company qualifies as a REIT for federal income tax purposes. JAVELIN Mortgage Investment has a market cap of $84.3 million and is part of the financial sector. Shares are down 32.5% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate JAVELIN Mortgage Investment a buy, 1 analyst rates it a sell, and 4 rate it a hold.

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TheStreet Ratings rates JAVELIN Mortgage Investment as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on JMI go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 232.0% when compared to the same quarter one year ago, falling from -$1.86 million to -$6.19 million.
  • Net operating cash flow has significantly decreased to $0.57 million or 82.41% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.87%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 225.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, JAVELIN MORTGAGE INVESTMENT's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for JAVELIN MORTGAGE INVESTMENT is currently very high, coming in at 88.33%. Regardless of JMI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JMI's net profit margin of -41.57% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: JAVELIN Mortgage Investment Ratings Report

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At the close, China HGS Real Estate ( HGSH) was up $0.06 (3.2%) to $1.96 on average volume. Throughout the day, 37,851 shares of China HGS Real Estate exchanged hands as compared to its average daily volume of 31,900 shares. The stock ranged in a price between $1.83-$2.31 after having opened the day at $2.10 as compared to the previous trading day's close of $1.90.

China HGS Real Estate Inc., through its subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd, develops real estate properties in the People's Republic of China. The company engages in the construction and sale of residential apartments, parking lots, and commercial properties. China HGS Real Estate has a market cap of $86.5 million and is part of the financial sector. Shares are down 55.7% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate China HGS Real Estate a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates China HGS Real Estate as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from TheStreet Ratings analysis on HGSH go as follows:

  • 48.58% is the gross profit margin for CHINA HGS REAL ESTATE INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 42.15% significantly outperformed against the industry average.
  • HGSH's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.10 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The share price of CHINA HGS REAL ESTATE INC has not done very well: it is down 16.48% 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Real Estate Management & Development industry average. The net income has significantly decreased by 31.1% when compared to the same quarter one year ago, falling from $13.45 million to $9.27 million.

You can view the full analysis from the report here: China HGS Real Estate Ratings Report

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Amrep ( AXR) was another company that pushed the Real Estate industry higher today. Amrep was up $0.14 (2.8%) to $5.18 on average volume. Throughout the day, 2,226 shares of Amrep exchanged hands as compared to its average daily volume of 2,700 shares. The stock ranged in a price between $5.10-$5.18 after having opened the day at $5.18 as compared to the previous trading day's close of $5.04.

AMREP Corporation, through its subsidiaries, is engaged in media services and real estate businesses in the United States. Amrep has a market cap of $41.3 million and is part of the financial sector. Shares are up 31.2% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Amrep a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Amrep as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from TheStreet Ratings analysis on AXR go as follows:

  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, AXR has underperformed the S&P 500 Index, declining 6.35% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The gross profit margin for AMREP CORP is rather low; currently it is at 19.00%. Regardless of AXR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.45% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Services & Supplies industry and the overall market, AMREP CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • AMREP CORP's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, AMREP CORP continued to lose money by earning -$0.43 versus -$0.47 in the prior year.
  • AXR, with its decline in revenue, underperformed when compared the industry average of 3.6%. Since the same quarter one year prior, revenues fell by 20.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Amrep Ratings Report

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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.