Trade-Ideas LLC identified China Lodging Group ( HTHT) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified China Lodging Group as such a stock due to the following factors:

  • HTHT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.5 million.
  • HTHT has traded 85,484 shares today.
  • HTHT is trading at 10.01 times the normal volume for the stock at this time of day.
  • HTHT is trading at a new high 11.08% 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 HTHT:

China Lodging Group, Limited, together with its subsidiaries, develops leased, manachised, and franchised hotels primarily in the People's Republic of China. The stock currently has a dividend yield of 1.8%. HTHT has a PE ratio of 34. Currently there are 4 analysts that rate China Lodging Group a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for China Lodging Group has been 188,700 shares per day over the past 30 days. China Lodging Group has a market cap of $2.2 billion and is part of the services sector and leisure industry. Shares are up 12.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates China Lodging Group as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • CHINA LODGING GROUP LTD -ADR has improved earnings per share by 40.0% 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 year. We feel that this trend should continue. During the past fiscal year, CHINA LODGING GROUP LTD -ADR increased its bottom line by earning $1.04 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($8.65 versus $1.04).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 30.8% when compared to the same quarter one year prior, rising from $7.09 million to $9.28 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.5%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HTHT's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, CHINA LODGING GROUP LTD -ADR has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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