Today's Dead Cat Bounce Stock: Canadian Solar (CSIQ)
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 Canadian Solar (CSIQ) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Canadian Solar as such a stock due to the following factors:
- CSIQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $239.0 million.
- CSIQ has traded 454,392 shares today.
- CSIQ is up 4.4% today.
- CSIQ was down 10.6% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in CSIQ with the Ticky from Trade-Ideas. See the FREE profile for CSIQ NOW at Trade-IdeasMore details on CSIQ: Canadian Solar Inc., together with its subsidiaries, engages in the design, development, manufacture, and sale of solar power products worldwide. The company offers solar wafers, cells, and solar module products that convert sunlight into electricity for various uses. Currently there are 3 analysts that rate Canadian Solar a buy, no analysts rate it a sell, and 1 rates it a hold.The average volume for Canadian Solar has been 4.1 million shares per day over the past 30 days. Canadian Solar has a market cap of $2.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.80 and a short float of 6.1% with 0.31 days to cover. Shares are up 35.2% 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 Canadian Solar as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.Highlights from the ratings report include:
- CSIQ's very impressive revenue growth greatly exceeded the industry average of 5.0%. Since the same quarter one year prior, revenues leaped by 50.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 155.44% and other important driving factors, this stock has surged by 958.23% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- CANADIAN SOLAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CANADIAN SOLAR INC reported poor results of -$4.52 versus -$2.12 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus -$4.52).
- The gross profit margin for CANADIAN SOLAR INC is rather low; currently it is at 20.41%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, CSIQ's net profit margin of 5.64% is significantly lower than the industry average.
- The debt-to-equity ratio is very high at 2.58 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CSIQ has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full Canadian Solar 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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