Trade-Ideas LLC identified HCP ( HCP) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified HCP as such a stock due to the following factors:

  • HCP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $116.5 million.
  • HCP has traded 1.9 million shares today.
  • HCP is trading at 1.97 times the normal volume for the stock at this time of day.
  • HCP crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 HCP:

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. The stock currently has a dividend yield of 6.8%. Currently there is 1 analyst that rates HCP a buy, 3 analysts rate it a sell, and 5 rate it a hold.

The average volume for HCP has been 3.9 million shares per day over the past 30 days. HCP has a market cap of $15.9 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.23 and a short float of 4.8% with 5.80 days to cover. Shares are down 10.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HCP as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 148.3% when compared to the same quarter one year prior, rising from -$240.61 million to $116.12 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 2.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HCP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HCP INC swung to a loss, reporting -$1.20 versus $1.95 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus -$1.20).
  • HCP has underperformed the S&P 500 Index, declining 7.50% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HCP INC's return on equity significantly trails that of both the industry average and the S&P 500.

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