Trade-Ideas LLC identified

Bitauto Holdings

(

BITA

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Bitauto Holdings as such a stock due to the following factors:

  • BITA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
  • BITA has traded 277,463 shares today.
  • BITA is down 3.2% today.
  • BITA was up 8.2% yesterday.

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

More details on BITA:

Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry in the People's Republic of China. The company operates in four segments: bitauto.com Advertising Business, EP Platform Business, taoche.com Business, and Digital Marketing Solutions Business. BITA has a PE ratio of 46. Currently there are 3 analysts that rate Bitauto Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

TheStreet Recommends

The average volume for Bitauto Holdings has been 1.0 million shares per day over the past 30 days. Bitauto has a market cap of $1.6 billion and is part of the technology sector and internet industry. Shares are down 62.3% 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 Bitauto Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • BITA's very impressive revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues leaped by 92.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • BITA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.98, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for BITAUTO HOLDINGS LTD -ADR is rather high; currently it is at 67.83%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, BITA's net profit margin of -5.89% significantly underperformed when compared to the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market on the basis of return on equity, BITAUTO HOLDINGS LTD -ADR underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 68.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 138.09% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, BITA is still more expensive than most of the other companies in its industry.

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.