UDR (UDR) Roof Leaking Today

Trade-Ideas LLC identified UDR ( UDR) 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 UDR as such a stock due to the following factors:

  • UDR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.1 million.
  • UDR has traded 630,579 shares today.
  • UDR is trading at 2.98 times the normal volume for the stock at this time of day.
  • UDR 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 UDR:

UDR, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It owns, operates, acquires, renovates, develops, redevelops, and manages multifamily apartment communities. The stock currently has a dividend yield of 3.2%. UDR has a PE ratio of 35. Currently there are 2 analysts that rate UDR a buy, 2 analysts rate it a sell, and 9 rate it a hold.

The average volume for UDR has been 1.8 million shares per day over the past 30 days. UDR has a market cap of $9.9 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.45 and a short float of 5.7% with 4.85 days to cover. Shares are down 2.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates UDR as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $112.49 million or 17.15% when compared to the same quarter last year. In addition, UDR INC has also modestly surpassed the industry average cash flow growth rate of 9.08%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • UDR, with its decline in revenue, underperformed when compared the industry average of 12.1%. Since the same quarter one year prior, revenues fell by 15.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, UDR INC's return on equity is below that of both the industry average and the S&P 500.
  • UDR INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, UDR INC increased its bottom line by earning $1.27 versus $0.60 in the prior year. For the next year, the market is expecting a contraction of 83.5% in earnings ($0.21 versus $1.27).

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