Trade-Ideas LLC identified Omega Healthcare Investors ( OHI) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Omega Healthcare Investors as such a stock due to the following factors:

  • OHI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.8 million.
  • OHI has traded 6.2 million shares today.
  • OHI traded in a range 286.7% of the normal price range with a price range of $2.01.
  • OHI traded below its daily resistance level (quality: 17 days, meaning that the stock is crossing a resistance level set by the last 17 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on OHI:

Omega Healthcare Investors, Inc. is a real estate investment firm. The firm invests in the real estate markets of United States. It invests in healthcare facilities, primarily in long-term healthcare facilities in order to create its portfolio. Omega Healthcare Investors, Inc. The stock currently has a dividend yield of 6.8%. OHI has a PE ratio of 27. Currently there are 5 analysts that rate Omega Healthcare Investors a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Omega Healthcare Investors has been 1.4 million shares per day over the past 30 days. Omega Healthcare Investors has a market cap of $6.4 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.44 and a short float of 14.2% with 11.02 days to cover. Shares are down 2.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Omega Healthcare Investors as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • OHI's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 59.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for OMEGA HEALTHCARE INVS INC is rather high; currently it is at 52.03%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 26.09% trails the industry average.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, OHI has underperformed the S&P 500 Index, declining 5.95% 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, OMEGA HEALTHCARE INVS INC's return on equity is below that of both the industry average and the S&P 500.

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