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

  • HOV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.0 million.
  • HOV has traded 638,554 shares today.
  • HOV is trading at 4.10 times the normal volume for the stock at this time of day.
  • HOV is trading at a new high 4.29% 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 HOV:

Hovnanian Enterprises, Inc. designs, constructs, markets, and sells residential homes in the United States. It constructs single-family detached homes, attached townhomes and condominiums, urban infill, and active adult homes. HOV has a PE ratio of 1. Currently there are no analysts that rate Hovnanian a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Hovnanian has been 2.6 million shares per day over the past 30 days. Hovnanian has a market cap of $261.7 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.12 and a short float of 17.1% with 8.81 days to cover. Shares are down 49.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hovnanian as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 Household Durables industry. The net income has significantly decreased by 144.9% when compared to the same quarter one year ago, falling from $17.11 million to -$7.68 million.
  • The gross profit margin for HOVNANIAN ENTRPRS INC is rather low; currently it is at 18.12%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.42% trails that of the industry average.
  • Net operating cash flow has declined marginally to -$76.55 million or 4.24% when compared to the same quarter last year. Despite a decrease in cash flow of 4.24%, HOVNANIAN ENTRPRS INC is still significantly exceeding the industry average of -90.33%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.39%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 145.45% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • HOVNANIAN ENTRPRS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HOVNANIAN ENTRPRS INC increased its bottom line by earning $1.84 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 109.2% in earnings (-$0.17 versus $1.84).

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