Trade-Ideas LLC identified

Alibaba Group



) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Alibaba Group as such a stock due to the following factors:

  • BABA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $808.5 million.
  • BABA has traded 8.3 million shares today.
  • BABA is trading at 9.32 times the normal volume for the stock at this time of day.
  • BABA is trading at a new low 5.00% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 BABA:

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. BABA has a PE ratio of 18. Currently there are 16 analysts that rate Alibaba Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Alibaba Group has been 10.8 million shares per day over the past 30 days. Alibaba Group has a market cap of $195.1 billion and is part of the services sector and specialty retail industry. Shares are down 0.2% year-to-date as of the close of trading on Tuesday.

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TheStreet Quant Ratings

rates Alibaba Group as a


. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • Compared to other companies in the Internet Software & Services industry and the overall market, ALIBABA GROUP HLDG's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • BABA's revenue growth has slightly outpaced the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 25.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although BABA's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average.
  • The gross profit margin for ALIBABA GROUP HLDG is currently very high, coming in at 71.31%. Regardless of BABA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BABA's net profit margin of 34.00% significantly outperformed against the industry.
  • BABA has underperformed the S&P 500 Index, declining 11.22% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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