Eyes On SINA Corporation (SINA): Highlighted Storm The Castle 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 SINA Corporation (SINA) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified SINA Corporation as such a stock due to the following factors:
- SINA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $186.3 million.
- SINA has traded 1.4 million shares today.
- SINA is trading at 2.10 times the normal volume for the stock at this time of day.
- SINA crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.EXCLUSIVE OFFER: Get the inside scoop on opportunities in SINA with the Ticky from Trade-Ideas. See the FREE profile for SINA NOW at Trade-IdeasMore details on SINA: SINA.com is a leading Internet media company for Chinese communities worldwide, offering a full array of Chinese-language news, entertainment, e-commerce platforms, financial information, and lifestyle tips. SINA has a PE ratio of 63.1. Currently there are 7 analysts that rate SINA Corporation a buy, 1 analyst rates it a sell, and 2 rate it a hold.The average volume for SINA Corporation has been 2.6 million shares per day over the past 30 days. SINA has a market cap of $4.7 billion and is part of the technology sector and internet industry. The stock has a beta of 2.17 and a short float of 7% with 1.77 days to cover. Shares are down 16.9% year-to-date as of the close of trading on Friday.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 SINA Corporation as a hold. 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 and growth in earnings per share. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.Highlights from the ratings report include:
- SINA's revenue growth has slightly outpaced the industry average of 16.5%. Since the same quarter one year prior, revenues rose by 21.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SINA 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 4.02, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for SINA CORP is rather high; currently it is at 63.82%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.74% trails the industry average.
- Powered by its strong earnings growth of 164.28% and other important driving factors, this stock has surged by 32.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, SINA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full SINA Corporation 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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