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

  • RSO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • RSO has traded 59,605 shares today.
  • RSO is trading at 4.31 times the normal volume for the stock at this time of day.
  • RSO is trading at a new low 6.02% 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 RSO:

Resource Capital Corp., a diversified real estate investment trust, primarily focuses on originating, holding, and managing commercial mortgage loans and other commercial real estate-related debt and equity investments in the United States. The stock currently has a dividend yield of 15.4%. Currently there is 1 analyst that rates Resource Capital a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Resource Capital has been 372,200 shares per day over the past 30 days. Resource has a market cap of $345.1 million and is part of the financial sector and real estate industry. The stock has a beta of 1.30 and a short float of 5.6% with 5.85 days to cover. Shares are down 12.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Resource Capital as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market, RESOURCE CAPITAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Looking at the price performance of RSO's shares over the past 12 months, there is not much good news to report: the stock is down 36.81%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • RESOURCE CAPITAL CORP's earnings per share declined by 12.5% in the most recent quarter compared to 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, RESOURCE CAPITAL CORP increased its bottom line by earning $1.36 versus $1.32 in the prior year. For the next year, the market is expecting a contraction of 110.7% in earnings (-$0.15 versus $1.36).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 0.1% when compared to the same quarter one year prior, going from $12.87 million to $12.89 million.
  • The gross profit margin for RESOURCE CAPITAL CORP is rather high; currently it is at 65.36%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.92% is above that of the industry average.

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