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Trade-Ideas: Sohu.com (SOHU) 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 Sohu.com ( SOHU) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Sohu.com as such a stock due to the following factors:

  • SOHU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $153.2 million.
  • SOHU has a PE ratio of 30.3.
  • SOHU is currently in the upper 30% of its 1-year range.
  • SOHU is in the upper 25% of its 20-day range.
  • SOHU is in the upper 35% of its 5-day range.
  • SOHU is currently trading above yesterday's high.
  • SOHU has experienced a gap between today's open and yesterday's close of 0%.

'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.

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More details on SOHU:

Sohu.com Inc. provides online media, search, gaming, community, and mobile services in the People's Republic of China. SOHU has a PE ratio of 30.3. Currently there are 2 analysts that rate Sohu.com a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Sohu.com has been 1.3 million shares per day over the past 30 days. Sohu.com has a market cap of $2.8 billion and is part of the technology sector and internet industry. The stock has a beta of 2.41 and a short float of 8.5% with 1.06 days to cover. Shares are up 52.4% year to date as of the close of trading on Thursday.

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 Sohu.com 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, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • SOHU's revenue growth has slightly outpaced the industry average of 22.8%. Since the same quarter one year prior, revenues rose by 32.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although SOHU's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. To add to this, SOHU has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 87.28% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SOHU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 69.2% when compared to the same quarter one year prior, rising from $12.78 million to $21.63 million.

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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