Skip to main content

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.

Trade-Ideas LLC identified

Changyou.com

(

CYOU

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

  • CYOU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.6 million.
  • CYOU has traded 103,166 shares today.
  • CYOU is trading at 10.90 times the normal volume for the stock at this time of day.
  • CYOU is trading at a new high 3.25% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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.

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

More details on CYOU:

TheStreet Recommends

Changyou.com Limited develops and operates online games in the People's Republic of China. Currently there are no analysts that rate Changyou.com a buy, 3 analysts rate it a sell, and 2 rate it a hold.

The average volume for Changyou.com has been 152,000 shares per day over the past 30 days. Changyou.com has a market cap of $1.5 billion and is part of the technology sector and computer software & services industry. Shares are up 7.2% year-to-date as of the close of trading on Monday.

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 Changyou.com as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 10.8%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.17 is very high and demonstrates very strong liquidity.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CHANGYOU.COM LTD 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 suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, CHANGYOU.COM LTD swung to a loss, reporting -$0.06 versus $5.03 in the prior year. This year, the market expects an improvement in earnings ($3.11 versus -$0.06).
  • The gross profit margin for CHANGYOU.COM LTD is rather high; currently it is at 68.17%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CYOU's net profit margin of 5.04% is significantly lower than the industry average.

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.

null