Trade-Ideas: Qihoo 360 Technology (QIHU) Is Today's Momo Momentum Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Qihoo 360 Technology (QIHU) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Qihoo 360 Technology as such a stock due to the following factors:
- QIHU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $327.5 million.
- QIHU has a PE ratio of 214.6.
- QIHU is currently in the upper 30% of its 1-year range.
- QIHU is in the upper 25% of its 20-day range.
- QIHU is in the upper 35% of its 5-day range.
- QIHU is currently trading above yesterday's high.
- QIHU has experienced a gap between today's open and yesterday's close of 0.5%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.EXCLUSIVE OFFER: Get the inside scoop on opportunities in QIHU with the Ticky from Trade-Ideas. See the FREE profile for QIHU NOW at Trade-IdeasMore details on QIHU: Qihoo 360 Technology Co. Ltd. provides Internet and mobile security products in the People's Republic of China. QIHU has a PE ratio of 214.6. Currently there are 7 analysts that rate Qihoo 360 Technology a buy, no analysts rate it a sell, and 1 rates it a hold.The average volume for Qihoo 360 Technology has been 2.6 million shares per day over the past 30 days. Qihoo 360 Technology has a market cap of $10.0 billion and is part of the technology sector and internet industry. Shares are up 175.5% year to date as of the close of trading on Wednesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Qihoo 360 Technology as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.Highlights from the ratings report include:
- QIHU's very impressive revenue growth greatly exceeded the industry average of 22.5%. Since the same quarter one year prior, revenues leaped by 108.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- QIHU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.89, which clearly demonstrates the ability to cover short-term cash needs.
- QIHOO 360 TECHNOLGY CO -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, QIHOO 360 TECHNOLGY CO -ADR increased its bottom line by earning $0.40 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $0.40).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 371.6% when compared to the same quarter one year prior, rising from $7.00 million to $33.00 million.
- Powered by its strong earnings growth of 333.33% and other important driving factors, this stock has surged by 261.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Qihoo 360 Technology Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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