Trade-Ideas LLC identified HCP ( HCP) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified HCP as such a stock due to the following factors:

  • HCP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $132.7 million.
  • HCP has traded 2.5 million shares today.
  • HCP traded in a range 209% of the normal price range with a price range of $2.47.
  • HCP traded below its daily resistance level (quality: 83 days, meaning that the stock is crossing a resistance level set by the last 83 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on HCP:

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The stock currently has a dividend yield of 6.4%. HCP has a PE ratio of 72. Currently there are 2 analysts that rate HCP a buy, 3 analysts rate it a sell, and 7 rate it a hold.

The average volume for HCP has been 3.9 million shares per day over the past 30 days. HCP has a market cap of $16.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.03 and a short float of 3.6% with 3.60 days to cover. Shares are down 6.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HCP as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • HCP's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 9.8%. 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.
  • The gross profit margin for HCP INC is rather high; currently it is at 53.74%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 17.31% trails the industry average.
  • Net operating cash flow has declined marginally to $273.67 million or 0.59% when compared to the same quarter last year. Despite a decrease in cash flow HCP INC is still fairing well by exceeding its industry average cash flow growth rate of -50.14%.
  • HCP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, HCP INC reported lower earnings of $1.95 versus $1.97 in the prior year. For the next year, the market is expecting a contraction of 68.7% in earnings ($0.61 versus $1.95).
  • 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 53.4% when compared to the same quarter one year ago, falling from $247.65 million to $115.36 million.

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