Trina Solar (TSL) Is Today's Dead Cat Bounce Stock

Trade-Ideas LLC identified Trina Solar (TSL) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Trina Solar

(

TSL

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Trina Solar as such a stock due to the following factors:

  • TSL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.6 million.
  • TSL has traded 163,070 shares today.
  • TSL is up 4.1% today.
  • TSL was down 5.1% yesterday.

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More details on TSL:

Trina Solar Limited operates as an integrated solar-power products manufacturer and solar system developer in the People's Republic of China, Europe, the United States, and other Asia Pacific regions. TSL has a PE ratio of 4. Currently there are 5 analysts that rate Trina Solar a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Trina Solar has been 2.3 million shares per day over the past 30 days. Trina Solar has a market cap of $969.1 million and is part of the technology sector and electronics industry. Shares are up 10.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Trina Solar as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share 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:

  • The revenue growth greatly exceeded the industry average of 11.0%. Since the same quarter one year prior, revenues rose by 39.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TRINA SOLAR 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. This trend suggests that the performance of the business is improving. During the past fiscal year, TRINA SOLAR LTD turned its bottom line around by earning $0.78 versus -$1.02 in the prior year. This year, the market expects an improvement in earnings ($1.08 versus $0.78).
  • After a year of stock price fluctuations, the net result is that TSL's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for TRINA SOLAR LTD is rather low; currently it is at 20.04%. Regardless of TSL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, TSL's net profit margin of 5.65% is significantly lower than the industry average.
  • The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, TSL has a quick ratio of 0.63, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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