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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 $10.1 million.
  • BITA has traded 140,543 shares today.
  • BITA is trading at 6.26 times the normal volume for the stock at this time of day.
  • BITA is trading at a new low 10.18% 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, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Bitauto Holdings has been 593,400 shares per day over the past 30 days. Bitauto has a market cap of $1.5 billion and is part of the technology sector and internet industry. Shares are down 13.2% year-to-date as of the close of trading on Thursday.

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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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 18.4%. 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. To add to this, BITA has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for BITAUTO HOLDINGS LTD -ADR is currently very high, coming in at 73.07%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -21.82% is in-line with the industry average.
  • 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 274.1% when compared to the same quarter one year ago, falling from $22.95 million to -$39.97 million.
  • 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, BITAUTO HOLDINGS LTD -ADR's return on equity significantly trails that of both the industry average and the S&P 500.

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