Sovran Self Storage (SSS) Spotted As Roof Leaker Today

Trade-Ideas LLC identified Sovran Self Storage ( SSS) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sovran Self Storage as such a stock due to the following factors:

  • SSS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.9 million.
  • SSS has traded 197,705 shares today.
  • SSS is trading at 1.73 times the normal volume for the stock at this time of day.
  • SSS crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on SSS:

Sovran Self Storage, Inc. operates as a real estate investment trust (REIT). It engages in the acquisition, ownership, and management of self-storage properties in the United States. The stock currently has a dividend yield of 3.5%. SSS has a PE ratio of 33. Currently there are 7 analysts that rate Sovran Self Storage a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Sovran Self Storage has been 434,400 shares per day over the past 30 days. Sovran Self has a market cap of $4.2 billion and is part of the financial sector and real estate industry. Shares are down 0.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sovran Self Storage as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • SSS's revenue growth has slightly outpaced the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 16.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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 Real Estate Investment Trusts (REITs) industry average. The net income increased by 26.2% when compared to the same quarter one year prior, rising from $22.45 million to $28.34 million.
  • Net operating cash flow has increased to $37.92 million or 22.56% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.94%.
  • The gross profit margin for SOVRAN SELF STORAGE INC is rather high; currently it is at 50.19%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 28.32% trails the industry average.

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