Watch Out: Barbarians At The Gate For Highwoods Properties (HIW)

Trade-Ideas LLC identified Highwoods Properties ( HIW) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Highwoods Properties as such a stock due to the following factors:

  • HIW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.0 million.
  • HIW has traded 73,872 shares today.
  • HIW traded in a range 209.2% of the normal price range with a price range of $2.12.
  • HIW traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on HIW:

Highwoods Properties, Inc. is a real estate investment trust. The trust engages in leasing, management, development, construction, and other customer-related services for its properties and for third parties. It invests in the real estate markets of United States. The stock currently has a dividend yield of 4%. HIW has a PE ratio of 41. Currently there are 8 analysts that rate Highwoods Properties a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Highwoods Properties has been 798,700 shares per day over the past 30 days. Highwoods has a market cap of $4.0 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.81 and a short float of 4.5% with 2.91 days to cover. Shares are down 4.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Highwoods Properties as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • HIW's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 7.5%. 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.
  • Net operating cash flow has increased to $87.12 million or 25.99% when compared to the same quarter last year. In addition, HIGHWOODS PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of -50.14%.
  • HIGHWOODS PROPERTIES INC's earnings per share declined by 45.6% 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, HIGHWOODS PROPERTIES INC increased its bottom line by earning $1.19 versus $0.66 in the prior year. For the next year, the market is expecting a contraction of 14.3% in earnings ($1.02 versus $1.19).
  • The share price of HIGHWOODS PROPERTIES INC is down 10.09% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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