Trade-Ideas LLC identified China Lodging Group ( HTHT) as a weak 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 $6.5 million.
  • HTHT has traded 92,991 shares today.
  • HTHT is trading at 5.95 times the normal volume for the stock at this time of day.
  • HTHT is trading at a new low 3.29% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 1.9%. HTHT has a PE ratio of 33. 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 187,400 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 11.8% year-to-date as of the close of trading on Thursday.

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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 revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • HTHT's revenue growth has slightly outpaced the industry average of 11.4%. Since the same quarter one year prior, revenues rose by 14.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CHINA LODGING GROUP LTD -ADR 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. 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 significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 1054.0% when compared to the same quarter one year prior, rising from -$1.13 million to $10.76 million.
  • Net operating cash flow has significantly increased by 68.89% to $50.39 million when compared to the same quarter last year. In addition, CHINA LODGING GROUP LTD -ADR has also vastly surpassed the industry average cash flow growth rate of 8.83%.
  • Powered by its strong earnings growth of 900.00% and other important driving factors, this stock has surged by 58.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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