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Tickers in this Article: AMCP, AFFY, AEC, AMSG, ARP
Big moves up and down in share prices need to be supported by increasing volume or the move will rarely be sustainable. One way to determine strong trends and get on board long upward or downward moves is to look at stocks that are trading a large amount of volume early on in the day, when compared with their average volume. This will help us set the best moves apart from the rest. (For background reading, see Volume Rate Of Change.)

Here are five stocks that were trading on very large volume by noon today. Let's take a closer look at one that has seen a large share price change as well.

Company Shares Traded* % of Average Volume
(3 months)

152,672 270%
Associated Estates Realty
American Reprographics
*Data as of 11:51am EST September 19, 2008

Pay the Rent with Rental Dividends
There are not many areas of real estate in which an investor can make money nowadays; however, there seems to be a glimmer of hope in Associated Estates, a real estate investment trust (REIT) that focuses on multifamily residential units. As people have a harder time getting mortgages, or lose their homes, it follows that the rental market should increase throughout the United States. If this is true, then a company such as Associated Estates should do well, and so far it is. With over earnings per share of over $2, Associated Estates has a P/E ratio of less than 7 at current prices - which is amazing when compared to its industry average P/E of more than 20. (To learn more about these securities, read What Are REITs?)

The recent run-up in price (the stock opened above its 52 week high) on high volume may be attributed to the dividend it just declared, however just because it is now yielding over 5%, does not make it a good buy. A closer look at the financials tells me that I would prefer to stay on the side lines with this one for now. Associated Estates was cash-flow negative last fiscal year, and a quick look at the balance sheet shows that it still has a lot of debt at almost $600 million. Associated Estates can definitely be considered the best in its class; however, it is a class that I would not want to touch until this housing crisis is over.

Add Your Two Cents
What do you think will happen with these stocks going forward? Will increasing volume help their current trends continue? Be sure to join me (aytonmm) in the FREE Stock Picking Community to share your thoughts and see what other investors are saying.

For further reading, be sure to check out our related articles The REIT Way, and Basic Valuation Of A Real Estate Investment Trust (REIT).

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