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Trade-Ideas LLC identified

Bitauto Holdings

(

BITA

) as a weak on high relative volume 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 $13.7 million.
  • BITA has traded 141,727 shares today.
  • BITA is trading at 3.86 times the normal volume for the stock at this time of day.
  • BITA 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.

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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 three segments: Advertising Business, EP Platform Business, and Digital Marketing Solutions Business. Currently there is 1 analyst that rates Bitauto Holdings a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Bitauto Holdings has been 618,000 shares per day over the past 30 days. Bitauto has a market cap of $1.2 billion and is part of the technology sector and internet industry. Shares are down 34.2% year-to-date as of the close of trading on Friday.

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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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 48.5%. 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.
  • The gross profit margin for BITAUTO HOLDINGS LTD -ADR is rather high; currently it is at 67.47%. Regardless of BITA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BITA's net profit margin of -9.98% significantly underperformed when compared to the industry average.
  • BITAUTO HOLDINGS LTD -ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BITAUTO HOLDINGS LTD -ADR swung to a loss, reporting -$1.05 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($8.99 versus -$1.05).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 68.32%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1300.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 2051.3% when compared to the same quarter one year ago, falling from -$0.78 million to -$16.78 million.

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