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.

Trade-Ideas LLC identified

Baidu

(

BIDU

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

  • BIDU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $509.7 million.
  • BIDU has traded 731,683 shares today.
  • BIDU is trading at 2.73 times the normal volume for the stock at this time of day.
  • BIDU is trading at a new low 3.01% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in BIDU with the Ticky from Trade-Ideas. See the FREE profile for BIDU NOW at Trade-Ideas

More details on BIDU:

Baidu, Inc. provides Internet search services. BIDU has a PE ratio of 0.6. Currently there are 11 analysts that rate Baidu a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Baidu has been 3.0 million shares per day over the past 30 days. Baidu has a market cap of $76.0 billion and is part of the technology sector and internet industry. Shares are down 6.3% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Baidu as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 36.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BAIDU INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BAIDU INC increased its bottom line by earning $6.01 versus $4.96 in the prior year. This year, the market expects an improvement in earnings ($45.19 versus $6.01).
  • Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.05 is very high and demonstrates very strong liquidity.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.62% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The gross profit margin for BAIDU INC is rather high; currently it is at 65.22%. Regardless of BIDU'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 22.83% trails the industry average.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

null