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 $3.5 million.
  • HOV has traded 344,079 shares today.
  • HOV is trading at 2.67 times the normal volume for the stock at this time of day.
  • HOV is trading at a new high 3.37% 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 lifestyle homes. Currently there are no analysts that rate Hovnanian a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Hovnanian has been 1.9 million shares per day over the past 30 days. Hovnanian has a market cap of $260.8 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.96 and a short float of 15.7% with 7.97 days to cover. Shares are down 18.2% 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 deteriorating 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 92.1% when compared to the same quarter one year ago, falling from $322.46 million to $25.52 million.
  • The gross profit margin for HOVNANIAN ENTRPRS INC is rather low; currently it is at 18.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.68% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $12.15 million or 82.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.62%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 91.79% compared to 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.
  • 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, HOVNANIAN ENTRPRS INC swung to a loss, reporting -$0.12 versus $1.84 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$0.12).

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