Trade-Ideas LLC identified Diamond Resorts International ( DRII) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Diamond Resorts International as such a stock due to the following factors:

  • DRII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.3 million.
  • DRII has traded 52,121 shares today.
  • DRII is down 3.4% today.
  • DRII was up 21.5% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in DRII with the Ticky from Trade-Ideas. See the FREE profile for DRII NOW at Trade-Ideas

More details on DRII:

Diamond Resorts International, Inc. operates in the hospitality and vacation ownership industry in the United States, Hawaii, Canada, Mexico, the Caribbean, Central America, South America, Europe, Asia, Australia, New Zealand, and Africa. DRII has a PE ratio of 12. Currently there are 3 analysts that rate Diamond Resorts International a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Diamond Resorts International has been 1.1 million shares per day over the past 30 days. Diamond Resorts International has a market cap of $1.4 billion and is part of the services sector and leisure industry. The stock has a beta of 1.01 and a short float of 48.7% with 8.99 days to cover. Shares are down 9% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Diamond Resorts International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • DRII's revenue growth has slightly outpaced the industry average of 13.3%. Since the same quarter one year prior, revenues rose by 16.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Hotels, Restaurants & Leisure industry and the overall market, DIAMOND RESORTS INTL's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • DIAMOND RESORTS INTL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DIAMOND RESORTS INTL increased its bottom line by earning $1.98 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 17.2% in earnings ($1.64 versus $1.98).
  • Net operating cash flow has decreased to $34.63 million or 16.76% when compared to the same quarter last year. Despite a decrease in cash flow DIAMOND RESORTS INTL is still fairing well by exceeding its industry average cash flow growth rate of -53.39%.
  • The debt-to-equity ratio is very high at 4.49 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.