Investors Are Betting Big On Sunstone Hotel Investors, Inc. (SHO). Are They Right?

Analysts are forecasting revenue to suffer decline of -4.6 percent to $277M in the next fiscal quarter, while earnings are seen soaring by nearly 57.14 percent to $0.11 per share. History has shown that shares in Sunstone Hotel Investors, Inc. have gone up on 20 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.38 per share, better than the $0.35, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $281M, better than the $277M analysts expected. Earnings are estimated to increase by 5.7 percent this year, -44.11 percent next year and continue to increase by 19.9 percent annually for the next 5 years.

Sunstone Hotel Investors, Inc. (SHO) will probably climb 1.23 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $16 price as 12-month high target. This represents a whopping 9.66 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $15, which represents a return potential of 2.81 percent when compared to the closing price of the stock of $14.59 on Wednesday, February 13. The lowest price target for the stock is $12 — slightly more than -17.75 percent from SHO’s current share price.

The stock is currently hovering around the first support level of $14.05. Below this, the next support is placed in the zone of $13.5. Till the time, the SHO stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 57.97 on daily chart, which may remain a cause for concern. If the price breaks below $13.5 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $14.94 mark may result into a pull-back move towards $15.28 level.

On 13th of February, Sunstone Hotel Investors, Inc. (NYSE:SHO) shares ended higher after a volatile session. The shares accumulated 0.59 points or 4.21 percent at $14.59 with a heavy trade volume of 6.08 million shares. After opening the session at $13.89, the shares went as high as $14.74 and as low as $13.85, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $3.38 billion and now has 231.59 million shares outstanding. Sunstone Hotel Investors, Inc. (SHO) stock has gained 4.51 percent of market value in 21 trading days.

SHO stock has a trailing 3-year beta of 1.23, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.81 a share in the trailing twelve months. The stock’s value has surged 12.14 percent year to date (YTD) against a decline of -7.66 percent in 12 month’s time. The company’s shares still trade -17.1 percent away from its 1-year high of $17.60 and 14.88 percent up from 52-week low of $12.70. The average consensus rating on the company is 3.2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Shares of Sunstone Hotel Investors, Inc. (SHO) are trading at a P/E ratio of 17.31 times earnings reported for the past 12 months. The industry SHO operates in has an average P/E of 50.25. Its P/E ratio went as low as 8.08X and as high as 48.04 over the 5-year span. Further, it is sporting a 2.89 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8.78. 63.4 percent is the gross profit margin for Sunstone Hotel Investors, Inc. and operating margin sits at 13.9 percent. Along with this, the net profit margin is 16.8 percent.

Let’s take a look at some insider activity at Sunstone Hotel Investors, Inc. (NYSE:SHO) and see the pattern. The earliest insider trade took place on 12/14/2017. Giglia Bryan Albert parted with a total of 18.43 thousand shares of company at average share price of $16.73. The total for the sales was set at $308.27 thousand. After this transaction, the CFO account balance stood at 229.83 thousand shares. The stock lost -12.79 percent since that insider sale. On 08/29/2016, Hoffman Marc Andrew, COO, sold 10 thousand shares at a price per share of $13.92. This removed 139.2 thousand shares from the insider’s fortune and the stock saw a 4.81 percent rally in value since the news became public. This transaction left 236.71 thousand shares in the COO account.

On 08/17/2016, Director Lewis Thomas A performed a sale transaction worth $337 thousand. This sale at $13.48 each has eliminated 25 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 8.23 percent increase since the transaction was reported. The insider now is left with 57.96 thousand shares remaining in the account. Springer Robert C, who performs the Chief Investment Officer job, sold 33 thousand shares for $455.7 thousand. The disposal occurred on 08/15/2016 was priced at $13.81 per share. The share price soared 5.65 percent since the reporting date. Springer Robert C now left with a stake of 182.57 thousand SHO stock worth $2.66 million after the insider selling.