Trade-Ideas LLC identified

21Vianet Group

(

VNET

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified 21Vianet Group as such a stock due to the following factors:

  • VNET has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.3 million.
  • VNET has traded 434,854 shares today.
  • VNET is up 3% today.
  • VNET was down 5.9% yesterday.

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More details on VNET:

21Vianet Group, Inc. provides carrier-neutral Internet data center services to Internet companies, government entities, blue-chip enterprises, and small-to mid-sized enterprises in the People's Republic of China. Currently there are no analysts that rate 21Vianet Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for 21Vianet Group has been 1.3 million shares per day over the past 30 days. 21Vianet Group has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. Shares are down 38.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates 21Vianet Group as a

sell

. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • VNET has underperformed the S&P 500 Index, declining 24.90% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market, 21VIANET GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 37.62% is the gross profit margin for 21VIANET GROUP INC which we consider to be strong. Regardless of VNET's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VNET's net profit margin of -12.68% significantly underperformed when compared to the industry average.
  • VNET's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.16 is sturdy.
  • 21VIANET GROUP INC 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, 21VIANET GROUP INC continued to lose money by earning -$0.80 versus -$0.85 in the prior year. This year, the market expects an improvement in earnings (-$0.19 versus -$0.80).

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