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 or Stephanie Link.

Trade-Ideas LLC identified

Sky-mobi

(

MOBI

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sky-mobi as such a stock due to the following factors:

  • MOBI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.6 million.
  • MOBI has traded 64,099 shares today.
  • MOBI is up 5.1% today.
  • MOBI was down 13.3% yesterday.

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More details on MOBI:

Sky-mobi Limited, through its subsidiaries, engages in the operation of a mobile application platform embedded on mobile phones to provide mobile application store and services in the People's Republic of China. MOBI has a PE ratio of 143.4.

The average volume for Sky-mobi has been 789,400 shares per day over the past 30 days. Sky-mobi has a market cap of $325.5 million and is part of the technology sector and telecommunications industry. Shares are up 156.4% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sky-mobi as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, MOBI's share price has jumped by 437.74%, exceeding the performance of the broader market during that same time frame. Although MOBI had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 38.1% when compared to the same quarter one year prior, rising from $0.58 million to $0.80 million.
  • MOBI, with its decline in revenue, underperformed when compared the industry average of 10.9%. Since the same quarter one year prior, revenues fell by 18.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Software industry and the overall market, SKY-MOBI LTD -ADR's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for SKY-MOBI LTD -ADR is rather low; currently it is at 23.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 4.10% significantly trails the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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