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Today's Perilous Reversal Stock: SouFun Holdings (SFUN)

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 SouFun Holdings ( SFUN) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified SouFun Holdings as such a stock due to the following factors:

  • SFUN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $73.5 million.
  • SFUN has traded 1.1 million shares today.
  • SFUN is down 4.9% today.
  • SFUN was up 6.5% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SFUN with the Ticky from Trade-Ideas. See the FREE profile for SFUN NOW at Trade-Ideas

More details on SFUN:

SouFun Holdings Limited operates a real estate Internet portal, and a home furnishing and improvement Website in the People's Republic of China. The stock currently has a dividend yield of 2.7%. SFUN has a PE ratio of 30.6. Currently there are 3 analysts that rate SouFun Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SouFun Holdings has been 1.5 million shares per day over the past 30 days. SouFun has a market cap of $5.9 billion and is part of the technology sector and internet industry. Shares are up 206.2% year-to-date as of the close of trading on Tuesday.

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 SouFun Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 45.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 235.38% 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, SFUN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • SOUFUN HLDGS LTD 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 two years. We feel that this trend should continue. During the past fiscal year, SOUFUN HLDGS LTD increased its bottom line by earning $1.87 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($3.33 versus $1.87).
  • 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 108.9% when compared to the same quarter one year prior, rising from $49.17 million to $102.74 million.
  • The gross profit margin for SOUFUN HLDGS LTD is currently very high, coming in at 86.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 55.52% significantly outperformed against the industry average.

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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