Strong On High Volume: 500.com (WBAI)
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
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified 500.com as such a stock due to the following factors:
- WBAI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.5 million.
- WBAI has traded 334,788 shares today.
- WBAI is trading at 2.90 times the normal volume for the stock at this time of day.
- WBAI is trading at a new high 5.09% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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.
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More details on WBAI:
500.com Limited provides online sports lottery services in the People's Republic of China. It operates as an aggregator and processor of lottery purchase orders from its registered user accounts. WBAI has a PE ratio of 13.8. Currently there is 1 analyst that rates 500.com a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for 500.com has been 1.0 million shares per day over the past 30 days. 500.com has a market cap of $323.6 million and is part of the services sector and leisure industry. Shares are down 42.2% year-to-date as of the close of trading on Monday.
Analysis:
rates 500.com as a
. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 83.9% when compared to the same quarter one year ago, falling from $14.15 million to $2.28 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 78.03%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 86.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The gross profit margin for 500.COM LTD -ADR is currently very high, coming in at 89.89%. Regardless of WBAI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.80% trails the industry average.
- In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, 500.COM LTD -ADR's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- 500.COM LTD -ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, 500.COM LTD -ADR increased its bottom line by earning $0.70 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($1.13 versus $0.70).
- You can view the full 500.com Ratings Report.
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