Trade-Ideas LLC identified

Qunar Cayman Islands

(

QUNR

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

  • QUNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.5 million.
  • QUNR has traded 70,122 shares today.
  • QUNR is trading at 2.04 times the normal volume for the stock at this time of day.
  • QUNR is trading at a new low 3.08% 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 QUNR:

Qunar Cayman Islands Limited operates an online travel commerce platform in the People's Republic of China. Currently there is 1 analyst that rates Qunar Cayman Islands a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Qunar Cayman Islands has been 343,200 shares per day over the past 30 days. Qunar Cayman Islands has a market cap of $5.1 billion and is part of the services sector and leisure industry. Shares are down 33.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Qunar Cayman Islands as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, 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 616.5% when compared to the same quarter one year ago, falling from -$107.92 million to -$773.22 million.
  • The share price of QUNAR CAYMAN ISLANDS -ADR has not done very well: it is down 23.16% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The debt-to-equity ratio is very high at 4.39 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, QUNR's quick ratio is somewhat strong at 1.33, demonstrating the ability to handle short-term liquidity needs.
  • QUNAR CAYMAN ISLANDS -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, QUNAR CAYMAN ISLANDS -ADR reported poor results of -$8.50 versus -$2.53 in the prior year. This year, the market expects an improvement in earnings (-$4.52 versus -$8.50).
  • The gross profit margin for QUNAR CAYMAN ISLANDS -ADR is rather high; currently it is at 62.28%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, QUNR's net profit margin of -417.77% significantly underperformed when compared to the industry average.

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