Trade-Ideas LLC identified

Jumei International

(

JMEI

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

  • JMEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.0 million.
  • JMEI has traded 169,964 shares today.
  • JMEI is trading at 2.84 times the normal volume for the stock at this time of day.
  • JMEI is trading at a new low 4.07% 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 JMEI:

TheStreet Recommends

Jumei International Holding Limited operates as an online retailer of beauty products in the People's Republic of China. The company offers beauty products, such as cosmetics, skin care, cosmetic applicators, fragrance, and body care products; and beauty products for men, and baby and children. JMEI has a PE ratio of 41. Currently there are no analysts that rate Jumei International a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Jumei International has been 1.5 million shares per day over the past 30 days. Jumei International has a market cap of $790.4 million and is part of the services sector and specialty retail industry. Shares are down 43% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Jumei International as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • 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 & Catalog Retail industry. The net income has significantly decreased by 101.7% when compared to the same quarter one year ago, falling from $10.70 million to -$0.18 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Internet & Catalog Retail industry and the overall market, JUMEI INTL HOLDING LTD -ADR's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for JUMEI INTL HOLDING LTD -ADR is currently lower than what is desirable, coming in at 28.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.06% trails that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 75.48%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. 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.
  • JUMEI INTL HOLDING 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, JUMEI INTL HOLDING LTD -ADR reported lower earnings of $0.12 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($0.37 versus $0.12).

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