Canadian Solar (CSIQ) Is Today's Water-Logged And Getting Wetter Stock
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) 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 $38.6 million.
- CSIQ has traded 4.1 million shares today.
- CSIQ traded in a range 283.2% of the normal price range with a price range of $3.37.
- CSIQ traded below its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on CSIQ:
Canadian Solar Inc., together with its subsidiaries, designs, develops, manufactures, and sells solar wafers, cells, and solar power products worldwide. The company operates in two segments, Module and Energy. CSIQ has a PE ratio of 5. Currently there are 7 analysts that rate Canadian Solar a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Canadian Solar has been 2.4 million shares per day over the past 30 days. Canadian Solar has a market cap of $1.3 billion and is part of the technology sector and electronics industry. The stock has a beta of 4.05 and a short float of 15.2% with 3.59 days to cover. Shares are down 4.8% year-to-date as of the close of trading on Monday.
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Analysis:
rates Canadian Solar as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 11.0%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CANADIAN SOLAR INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 68.0% when compared to the same quarter one year ago, falling from $55.78 million to $17.86 million.
- Currently the debt-to-equity ratio of 1.84 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, CSIQ has a quick ratio of 0.62, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full Canadian Solar Ratings Report.
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