Top investors say DiamondRock Hospitality Company (DRH) ticks everything they need

DiamondRock Hospitality Company (NYSE: DRH) stock fell -2.78% on Wednesday to $7.69 against a previous-day closing price of $7.91. With 1.65 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.52 million shares. During the session, the REIT – Hotel & Motel company that operates in wider Real Estate sector, reached to the highest price of $7.87 whereas the lowest price it dropped to was $7.67. The 52-week range on DRH shows that it touched its highest point at $10.98 and its lowest point at $7.14 during that stretch. It currently has a 1-year price target of $10.05. With its current market cap of 1.64 billion, DRH has annualized dividend of $0.12 while the current yield stands at 1.56%. Beta for the stock currently stands at 1.63.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DRH was down-trending over the past week, with a drop of -5.18%, but this was down by -2.78% over a month. Three-month performance dropped to -13.98% while six-month performance fell -14.42%. The stock lost -18.75% in the past year, while it has lost -6.11% so far this year. A look at the trailing 12-month EPS for DRH yields 0.46 with Next year EPS estimates of 0.49. For the next quarter, that number is 0.19. This implies an EPS growth rate of 148.40% for this year and 14.65% for next year. EPS is expected to decline by -9.50% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 1.40%.

Float and Shares Shorts:

At present, 211.41 million DRH shares are outstanding with a float of 204.44 million shares on hand for trading. On May 14, 2023, short shares totaled 12.24 million, which was 5.84% higher than short shares on Apr 13, 2023. In addition to Mr. Mark W. Brugger as the firm’s Co-Founder, Pres, CEO & Director, Mr. Jeffrey John Donnelly C.F.A. serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 102.51% of DRH’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 66.53% of DRH, in contrast to 5.49% held by mutual funds. Shares owned by individuals account for 43.01%. As the largest shareholder in DRH with 17.63% of the stake, The Vanguard Group, Inc. holds 36,942,727 shares worth 36,942,727. A second-largest stockholder of DRH, BlackRock Fund Advisors, holds 34,283,206 shares, controlling over 16.36% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in DRH, holding 13,736,345 shares or 6.56% stake. With a 7.25% stake in DRH, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 15,183,482 shares are owned by the mutual fund manager. The Vanguard Real Estate Index Fund, which owns about 4.39% of DRH stock, is the second-largest Mutual Fund holder. It holds 9,202,616 shares valued at 74.63 million. Fidelity Japan Fidelity US REIT M holds 3.90% of the stake in DRH, owning 8,162,300 shares worth 66.2 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, DRH reported revenue of $281.41M and operating income of $63.67M. The EBITDA in the recently reported quarter was $91.06M and diluted EPS was $0.23.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DRH since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With DRH analysts setting a high price target of $11.00 and a low target of $8.00, the average target price over the next 12 months is $9.95. Based on these targets, DRH could surge 43.04% to reach the target high and rise by 4.03% to reach the target low. Reaching the average price target will result in a growth of 29.39% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded DRH stock several times over the past three months with 4 Buys and 5 Sells. In these transactions, 309,846 shares were bought while 237,502 shares were sold. The number of buy transactions has increased to 9 while that of sell transactions has risen to 6 over the past year. The total number of shares bought during that period was 458,124 while 261,812 shares were sold.

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